GLDM - Inflation's Persistence Explains Gold's Strength
2024-03-12 17:28:36 ET
Summary
- Gold's breakout to record highs is attributed to the persistence of consumer price inflation.
- The correlation between the consumer price index and gold prices has held true throughout the decades.
- Gold is likely anticipating a coming increase in the year-over-year CPI rate, making it an attractive inflation hedge.
Just emerging from a multi-month dormancy to command the investing world’s spotlight, investors are still discussing the reasons for gold’s breakout to record highs and, more importantly, if the gold bull still has legs. The most common assumption is that the fed funds outlook is the reason for the metal’s latest strength, a point well supported by near-term interest rate expectations. However, a far bigger catalyst for gold’s demand explosion merits discussion; namely, the persistence of consumer price inflation....
Inflation's Persistence Explains Gold's Strength