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A lot happened in the last 48 hours. A historic oil reserve release, a CPI report that was outdated before the ink dried, and a Fed that's running out of room to move. Today I'm breaking down why yesterday's inflation data matters less than what's coming next - and what it all means for gold and silver.

Ok, let’s dive in. 👇

Gold held near $5,180 on Wednesday as two big stories collided. February CPI came in right on expectations at 2.4% - no surprises there, as I’ll discuss in a minute - but that number was locked in before the Iran war sent oil prices into orbit. The real headline: the IEA announced its largest-ever emergency release at 400 million barrels of strategic reserves, dwarfing the 182 million barrels released after Russia invaded Ukraine.

Oil dropped from nearly $120 to around $90 on the news, temporarily easing inflation fears and taking some wind out of gold's sails. But "temporary" is the key word - the Strait of Hormuz remains effectively shut, and no amount of reserve releases can replace 20 million barrels a day of transit indefinitely.

The Fed is all but certain to hold rates steady next week, with markets now pricing just one 25bp cut this year, likely in September. Silver slipped below $86 on the same crosscurrents, giving back some of last week's gains as the stronger dollar and rising Treasury yields weighed on the more volatile metal.

Despite the chop, gold is still up over 20% year-to-date with successive record highs, and silver remains up roughly 160% over the past twelve months. The pullbacks feel uncomfortable in real time, but zoom out and the trend hasn't changed.

Yesterday morning, the Bureau of Labor Statistics released the Consumer Price Index for February. Headline inflation came in at 2.4% year-over-year. Core CPI - which strips out food and energy - rose 2.5%. Both numbers matched what economists expected.

On any other day, a steady inflation print would be reassuring. Today, it's almost irrelevant.

Why This Report Is Already Out of Date

The CPI measures what consumers paid for goods and services during the month of February. The data collection window closed before the U.S.-Israel military strikes on Iran began on February 28th. That means this report captures none of the disruption that's dominated markets for the past two weeks.

Since those strikes, oil prices have surged roughly 18% from late-February levels. Gold briefly touched $5,400 an ounce on March 3rd before settling into the $5,100-$5,200 range. Silver spiked to $88.

None of that shows up in today's numbers.

Morgan Stanley's Ellen Zentner put it plainly: against the current backdrop of geopolitical uncertainty and surging oil prices, a steady inflation reading may not carry much weight - with markets or with the Fed.

The real inflation impact from the Iran conflict will start showing up in the March and April CPI reports. Higher energy costs don't stay at the pump. They show up in shipping rates, then food prices, then gradually across the board.

The Numbers Beneath the Surface

Even without the Middle East, this report wasn't pretty.

Beef and veal prices jumped 1.5% in February alone - up 14.4% from a year ago, driven by U.S. cattle herds sitting at their lowest levels in decades. Coffee is up 18% year-over-year thanks to extreme weather hammering crops in Vietnam and Brazil. Utility gas surged 3.1% for the month.

This part tends to get buried in the coverage. The October 2025 CPI data was never properly collected due to the government shutdown that ran from October 1st to November 12th. Federal statisticians couldn't gather typical price data during that window, so the BLS assumed no price increases occurred for most categories. That artificially depressed the baseline, which means the year-over-year comparisons we're looking at now may be flattering reality.

Tariffs could make it worse. The 10% universal import surcharge only took effect on February 24th - just four days before the collection window closed - so its impact barely registers here. But Trade Representative Jamieson Greer has signalled tariffs could rise to 15% following a recent Supreme Court ruling. Goldman Sachs expects tariff-exposed goods like recreation products to keep climbing. Wells Fargo has projected headline CPI could reach 3.2% by the third quarter.

What This Means for Gold

The Fed has cut interest rates by 1.75 percentage points during this cycle, bringing the target range to 3.50-3.75%. Markets now expect them to hold steady at next week's March 17-18 meeting, and most likely at the following two meetings after that.

That puts the Fed in a difficult position. The labour market is softening - economists forecast just 59,000 new jobs in last month's payrolls report. Normally, that kind of weakness would justify further cuts. But with oil prices elevated, tariffs feeding through, and the Iran situation unresolved, cutting rates now would only make the inflation problem harder to contain.

This is gold's sweet spot. When the Fed can't cut because of inflation and can't hold because of a weakening economy, investors look for somewhere to park capital that doesn't depend on a central bank making the right call.

That's gold's entire job description.

JPMorgan reiterated their year-end target of $6,300 per ounce last week - backed by central bank buying and steady investor demand, with or without the geopolitical drama. Gold is up roughly 22% year-to-date. And the inflation data that would justify those gains hasn't even hit the official numbers yet.

Yesterday’s CPI report told us where inflation was in February. The market is already pricing where it's going. For gold holders, that gap between the rearview mirror and the windshield tells us everything we need to know.

That’s all for this Thursday, folks. I’ll see you on Sunday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com