We continue to hear so much chatter about inflation; that’s the biggest factor driving gold recently and it’ll continue to be the driving force behind future rallies. Gold is still a good value in the longer term.
The gold trade seems to be a little too easy recently, incrementally working its way higher since putting in a low of $1,677.30 on March 31st. Is gold finally behaving the way one would expect in an inflationary environment?
Every time it looks like a recovery in gold prices is coming, it rolls back over. In reality, this market has been sideways with a slightly downward slope for the past 6 months.
There’s been much debate about whether or not the reflation efforts would create inflation or if we’re just seeing a “normalization” in rates. We’ll see now, at these levels, if Treasuries pause and consolidate or continue to move lower as yields continue to climb.
The rotation out of risky assets and into the safe returns in Treasuries will slow. The bond market is telling us all that inflation is here. Once we embrace this inflation, gold prices will begin to march higher.
Platinum has been ignored for too long. Future demand will drive platinum back towards $2,000. It’s been there before; it won’t be that hard to get back.
Every time it looks like a recovery in gold prices is coming, it rolls back over. In reality, this market has been sideways with a slightly downward slope for the past 6 months.
