U.S. Inflation Rate Holds Steady: Minor CPI Rise Amid Falling Energy Costs

Overview of November's CPI Data

In November, the U.S. Consumer Price Index (CPI), a principal measure of inflation, recorded a modest increase of 0.1%. This consistent annual rise of 3.1% reflects subtle economic shifts, with energy costs experiencing a significant decline while expenses for housing and food continue to gradually rise.

Falling Energy Prices Play a Key Role

The latest data released by the U.S. Bureau of Labor Statistics highlights a notable 2.3% decrease in energy prices. This decline is primarily driven by a 6% drop in gasoline prices and a 2.7% fall in fuel oil prices. These factors have contributed to moderating the overall inflation rates. Despite this, the impact on Wall Street has been minimal, with major stock indexes showing little fluctuation in early trading. Similarly, the cryptocurrency and precious metals markets have remained largely unaffected.

According to the inflation report, "The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in November on a seasonally adjusted basis, after being unchanged in October. Over the last 12 months, the all items index increased 3.1 percent before seasonal adjustment."

Implications for the Federal Reserve

The recent CPI statistics are expected to influence the Federal Reserve's decision regarding interest rates. While some market forecasts suggest a pause in rate hikes and potential reductions in the future, Fed analyst Jim Grant predicts that rates will remain high in the near term without any immediate reduction. This is likely to impact the Federal Open Market Committee (FOMC) meeting scheduled for December 13, 2023.

According to the CME Fedwatch tool, there is a 98.4% probability that the federal funds rate will remain unchanged, with only a slim 1.6% chance of an increase on Wednesday.

Share Your Thoughts

What are your thoughts on the latest CPI report? Feel free to share your opinions and insights in the comments section below.

Frequently Asked Questions

Do you need to open a Precious Metal IRA

Precious metals are not insured. This is the most important fact to know before you open an IRA account. There are no ways to recover the money you lost in an investment. This includes any loss of investments from theft, fire, flood or other circumstances.

Protect yourself against this type of loss by investing in physical gold or silver coins. These coins have been around for thousands and represent a real asset that can never be lost. If you were to offer them for sale today, they would likely fetch you more than you paid when you bought them.

If you decide to open an IRA account, choose a reputable company that offers competitive rates and products. Consider using a third-party custody company to keep your assets safe and allow you to access them at any time.

Do not open an account unless you're ready to retire. So, don't forget about the future!

Is buying gold a good way to save money for retirement?

Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.

The best form of investing is physical bullion, which is the most widely used. There are other ways to invest gold. You should research all options thoroughly before making a decision on which option you prefer.

If you're not looking to secure your wealth, it may be worth considering purchasing shares in mining equipment or companies that extract gold. If you need cash flow to finance your investment, then gold stocks could be a good option.

You also can put your money into exchange-traded funds (ETFs), which essentially give you exposure to the price of gold by holding gold-related securities instead of actual gold. These ETFs often include stocks of gold miners, precious metals refiners, and commodity trading companies.

Is it possible to hold a gold ETF within a Roth IRA

Although a 401k plan might not provide this option, you should still consider other options like an Individual Retirement Account (IRA).

A traditional IRA allows for contributions from both employer and employee. You can also invest in publicly traded businesses by creating an Employee Stock Ownership Plan (ESOP).

An ESOP provides tax advantages because employees share ownership of company stock and profits the business generates. The money invested in the ESOP is then taxed at lower rates than if it were held directly in the hands of the employee.

You can also get an Individual Retirement Annuity, or IRA. You can make regular payments to your IRA throughout your life, and you will also receive income when you retire. Contributions to IRAs don't have to be taxable

What are some of the advantages and disadvantages to a gold IRA

The main advantage of an Individual Retirement Account (IRA) over a regular savings account is that you don't have to pay taxes on any interest earned. This makes an IRA a great choice for people who are looking to save money but don’t want to pay any tax on the interest earned. But, this type of investment comes with its own set of disadvantages.

To give an example, if your IRA is withdrawn too often, you can lose all your accumulated funds. The IRS may prevent you from taking out your IRA funds until you reach 59 1/2. A penalty fee will be charged if you decide to withdraw funds.

A disadvantage to managing your IRA is the fact that fees must be paid. Many banks charge between 0.5% and 2.0% per year. Other providers charge monthly management fees ranging from $10 to $50.

If you prefer to keep your money outside a bank, you'll need to purchase insurance. A majority of insurance companies require that you possess a minimum amount gold to be eligible for a claim. It is possible that you will be required to purchase insurance that covers losses of up to $500,000.

If you choose to go with a gold IRA, you'll need to determine how much gold you want to use. You may be limited in the amount of gold you can have by some providers. Some providers allow you to choose your weight.

It's also important to decide whether or not to buy gold futures contracts. Futures contracts for gold are less expensive than physical gold. Futures contracts provide flexibility for purchasing gold. They let you set up a contract that has a specific expiration.

It is also important to choose the type of insurance coverage that you need. The standard policy does NOT include theft protection and loss due to fire or flood. However, it does cover damage caused by natural disasters. If you live in a high-risk area, you may want to add additional coverage.

Additional to your insurance, you will need to consider how much it costs to store your gold. Storage costs will not be covered by insurance. Safekeeping costs can be as high as $25-40 per month at most banks.

If you decide to open a gold IRA, you must first contact a qualified custodian. Custodians keep track of your investments and ensure compliance with federal regulations. Custodians cannot sell your assets. Instead, they must keep your assets for as long you request.

Once you have chosen the right type of IRA to suit your needs, it is time to fill out paperwork defining your goals. The plan should contain information about the types of investments you wish to make such as stocks, bonds or mutual funds. Also, you should specify how much each month you plan to invest.

You will need to fill out the forms and send them to your chosen provider together with a check for small deposits. The company will then review your application and mail you a letter of confirmation.

Consider consulting a financial advisor when opening a golden IRA. Financial planners are experts in investing and will help you decide which type of IRA works best for your situation. They can help you find cheaper insurance options to lower your costs.

How much gold can you keep in your portfolio

The amount that you want to invest will dictate how much money it takes. If you want to start small, then $5k-$10k would be great. As your business grows, you might consider renting out office space or desks. This will allow you to pay rent monthly, and not worry about it all at once. You only pay one month.

It is also important to decide what kind of business you want to run. In my case, I run a website-creation company. Our clients pay us between $1000-2000/month and depending on their order. If you are doing this type of thing, it is important to think about how much you can expect from each client.

Because freelance work pays freelancers, you won't likely get a monthly income if you do freelance work. You might get paid only once every six months.

So you need to decide what kind of income you want to generate before you know how much gold you will need.

I suggest starting with $1k-2k gold and building from there.

What should I pay into my Roth IRA

Roth IRAs let you save tax on retirement by allowing you to deposit your own money. The account cannot be withdrawn from until you are 59 1/2. However, if you do decide to take out some of your contributions before then, there are specific rules you must follow. First, your principal (the deposit amount originally made) is not transferable. No matter how much money you contribute, you cannot take out more than was originally deposited to the account. If you decide to withdraw more money than what you contributed initially, you will need to pay taxes.

You cannot withhold your earnings from income taxes. Withdrawing your earnings will result in you paying taxes. Let's take, for example, $5,000 in annual Roth IRA contributions. Let's also assume that you make $10,000 per year from your Roth IRA contributions. The federal income tax on your earnings would amount to $3,500. You would have $6,500 less. Because you can only withdraw what you have initially contributed, this is all you can take out.

You would still owe tax on $1,500 if you took out $4,000 of your earnings. In addition, 50% of your earnings will be subject to tax again (half of 40%). Even though you had $7,000 in your Roth IRA account, you only received $4,000.

There are two types: Roth IRAs that are traditional and Roth. Traditional IRAs allow pre-tax contributions to be deducted from your taxable tax income. Your traditional IRA allows you to withdraw your entire contribution plus any interest. You can withdraw as much as you want from a traditional IRA.

A Roth IRA doesn't allow you to deduct your contributions. You can withdraw your entire contribution, plus accrued interests, after you retire. Unlike a traditional IRA, there is no minimum withdrawal requirement. You don't have to wait until you turn 70 1/2 years old before withdrawing your contribution.

Who has the gold in a IRA gold?

The IRS considers an individual who owns gold as holding “a form of money” subject to taxation.

To be eligible for the tax-free status, you must possess at least $10,000 gold and have had it stored for at least five consecutive years.

While gold may be a great investment to help prevent inflation and volatility in the market, it's not wise to keep it if you won't use it.

If you plan on selling the gold someday, you'll need to report its value, which could affect how much capital gains taxes you owe when you cash in your investments.

Consult a financial advisor or accountant to determine your options.

Statistics

If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)

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The History of Gold as an Asset

From the beginning of history, gold was a popular currency. It was universally accepted due to its purity and divisibility, beauty, scarcity, and durability. It was also traded internationally due to its high value. Because there were no internationally recognized standards for measuring and weighing gold, the different weights of this metal could be used worldwide. For example, in England, one pound sterling was equal to 24 carats of silver; in France, one livre tournois was equal to 25 carats of gold; in Germany, one mark was equal to 28 carats of gold; etc.

The United States began issuing American coin made up 90% copper, 10% zinc and 0.942 fine-gold in the 1860s. This led to a decrease of demand for foreign currencies which in turn caused their prices to rise. At this point, the United States minted large amounts of gold coins, causing the price of gold to drop. Because the U.S. government had too much money coming into circulation, they needed to find a way to pay off some debt. They sold some of their excess gold to Europe to pay off the debt.

Many European countries began accepting gold in exchange for the dollar because they did not trust it. Many European countries began to use paper money and stopped accepting gold as payment after World War I. The price of gold rose significantly over the years. Even though gold's price fluctuates, it is still one of the most secure investments you could make.

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By: Jamie Redman
Title: U.S. Inflation Rate Holds Steady: Minor CPI Rise Amid Falling Energy Costs
Sourced From: news.bitcoin.com/us-cpi-sees-slight-uptick-in-november-fed-likely-to-maintain-high-rates/
Published Date: Tue, 12 Dec 2023 18:30:06 +0000