Gold's Record Highs Hinge on Fed's May Messaging Amid Mixed Inflation Reports.

The latest inflation report has led to markets recalibrating, with another rate hike in May and a possible rate cut in July being the most likely outcome. While many economists agree that the Fed will proceed with another 25-basis-point rate increase in May, there is some divergence within the Fed's ranks. For the gold market, inflation is not slowing down fast enough to warrant a run-up to record highs, but gold's overall bullish trend is still intact. Prices are likely to remain in consolidation mode until there is some clarity around economic growth and the Fed's action plan for this spring and summer.