Commodity Trade Mantra

Posts Tagged ‘Price Inflation’

Gold and Silver at Never-to-be-seen-Again Prices vs Financial Assets

The world is now entering the most dangerous period since the end of WWII. Real assets are at historical low against financial assets. Real assets such as commodities (including gold and silver) are even more oversold. Investors still have a unique opportunity to acquire physical gold and silver at prices which will not be seen for a very, very long time, if ever.

Central Banks’ Attitude to Gold Allocation to Undergo a Massive Change

Demand for physical gold, to escape the alternative of counterparty risk on deposits with Eurozone banks, is bound to grow. One suspects that the Eurozone area will be the first to see widespread gold buying by high net worth individuals, trying to protect themselves from a systemic event that has become all but certain, and will even threaten the entire banking system.

Gold and Silver Markets have Entered a New Phase

Even the most optimistic Trump supporters should be planning for a bumpy ride on the way to reform. The bull run in the S&P 500 has lasted almost 8 years. Do Trump’s plans for economic revitalization mean the run can persist for years longer? For those not supremely confident in Trump’s ability to shepherd the tax cuts & a big infrastructure program through congress, gold and silver is the better bet.

China, Price Inflation & Weak US Dollar - A Perfect Storm for Higher Gold Prices

We can see two roads higher for gold prices from here, the first would be a return of significant price inflation and weakness in the U.S. dollar. The second route to higher gold prices would be the return of safe haven buying, driven by serious geopolitical turmoil, China obviously would be at the forefront of that, and perhaps a shock to the global financial system.

Gold Preparing for a Healthy Rally into Higher Territory

Hedge funds and institutional speculators have been calling the tune for gold, trading the recent range, buying on dips, selling on rallies, and gradually adding to their physical holdings – a behavioral pattern we expect will continue within a rising trading range – at least until a price above the $1300 an ounce level is well established.

Trump Will Be Great For Gold And Silver (If Nothing Else)

If somehow Trump manages to get Congress to pass his border control and excise tax proposals, consumer prices on the products being imported at prices much lower than the same products can be produced domestically will soar. In addition, various price inflation reports are starting to emerge. Let’s not forget, gold loves inflation.

Gold, Investor Optimism & Price Inflation Outlook for 2017

The effect of price inflation is not, as commonly supposed, to drive up prices. Instead, it drives down the purchasing power of expanding government-issued currency. Awareness that money is losing purchasing power only dawns on the public late in the price inflation process. Gold is therefore a far better measure of currencies’ loss of purchasing power than government inflation measures.

Why Gold Prices Could Bottom "On or Close to", After Fed’s Rate Hike

The Fed rate hike could mark an intermediate bottom in gold prices. We could see a knee-jerk move lower on a Fed rate hike, followed by a sharp move higher marking a gold bottom on the CPI numbers. And in the background we have naturally rising interest rates, which, if they continue, will make servicing what is nearly a $20 trillion debt harder and harder.

Not 1, But 50 Amazing Proofs - The Secular Bull Market in Gold Will Continue

Gold’s bull market started in the year 2001, and after 4 years of correction from 2011 to 2015, the secular bull market is still intact. As the world is experiencing the burden of debt & sub mortgage crisis, which has the made the market illiquid & the bearish sentiment for gold is on extreme low. Gold on rise can be termed as the biggest surprise of 2016. Need Proof? Here are 50 of them.

Sticky Price Inflation at Highest Level since 2009 - What it Means for Gold

The common man has little idea of what the price of gold is because he does not fear inflation. Right now, gold is only an investment hedge for institutional players & still trending up since December. If inflation starts to become obvious though & the sticky CPI suggests that this might soon happen, any upside revaluation in the price of gold is likely to be quick & intense.

Gold Investing Justified By Paradigm Shifts In Politics And Markets

What needs to be considered is the future – that is riddled with uncertainty. What we do know, is that the growing negative sentiment towards our governments that have failed us both politically and economically, presents a need to safeguard wealth from the tides ahead. If you haven’t yet included gold in your portfolios, now is the time to do it.

Helicopter Money Will Boost Gold Market to New Highs

The idea of helicopter money would be to circumvent banks & to directly inject money into the bank accounts of people who then spend it & create higher inflation & growth. Of course, if you know history you will know that this is a measure that cannot heal anything—it just buys time. On the other hand, for gold it would be the time to shine if helicopter money would be implemented.

Rising Commodity Prices Signal Inflation - Purchasing Power Collapse

Asset inflation is increasingly spilling over into commodities, the feedstock for final goods. Unless commodity prices start falling soon, they are certain to drive up record price inflation, despite the lack of economic activity in the advanced economies. The official line, that there is almost no price inflation, is misleading everyone. Monetary inflation withdraws purchasing power from the masses.

A Technically Reasonable Correction in Gold Prices

For those who persist in looking at gold as an investment, the fall in gold prices in May is simply within the bounds of a normal correction. But they would be missing a vital point & that is by buying gold they are selling an inferior form of money. Not only is the dollar already demonstrably overvalued when priced in gold, but there is a growing inevitability of a further, substantial declines.

Gold Prices will rise on Weaker Dollar - Thanks to Fed's Monetary Policies

Change happens for a reason. Yellen may not be “missing” the risks of stagflation. More likely, she is heading there on purpose – as terrible as that sounds to say. How will gold react? That’s still not clear. But in our view, the longer term trends involve price inflation and economic stagflation. These will weigh down the dollar and drive gold prices higher against it.

Gold Prices Decline as Fed Bluffs on Right Direction of the U.S. Economy

Minutes of the Fed’s April meeting released last week showed Fed officials believed the U.S. economy could be ready for another interest rate increase in June. Will the Fed actually follow through? Sometimes, the speculation alone accomplishes the purposes that Fed has in mind. For instance, the gold price against the dollar immediately suffered from rate-hike speculation.

Eurozone in Danger on Falling Purchasing Power of Dollar, Not Rising Commodity Prices

All financial prices in the Eurozone are badly skewed. So far, the price inflation environment has been benign, but this year, things have been changing. Higher levels of debt will never allow the ECB to run interest rates up sufficiently to kill price inflation. More likely, positive rates of only one or two per cent would be enough to destabilise the Eurozone’s financial system.

Beware! The Billionaires Start Buying Gold as Stagflation Triggers Demand

The billionaires are buying gold. George Soros has just invested in a gold producer, Barrick gold. Soros’ former chief strategist Stan Druckenmiller has stated gold is now his largest currency holding. There is billionaire hedge fund manager Paul Singer who reportedly believes gold is at the beginning of a global rebound. Stagflation is driving positive perceptions of gold.

Why Gold Investors Should Love Central Banks

The ECB’s announcement last week is not a good test because it announced additional monetary stimulus as well as lower interest rates. Is gold going up because of negative interest rates, or because of monetary inflation? It is probably a combination of both, but it is hard to know which is the dominating factor. At least it is a bright spot for gold investors, if nothing else.

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