Note: Please consider that the PGM (Pt, Pd, Rh) content might change from one catalytic to another (with the same serial #) due to its condition affected by mileage, weather conditions, etc. *Assay made with Niton XLT3GOLDD+
Its common to speak about gold as a hedge against inflation, but in this summary of the journalist Mike Maharrey, he points to actual todays indicators.
Since mid-2021, we have lived through the worst price inflation since the 1970s, with the CPI (Consumer Price Index) peaking in June 2022 at 9.1 percent. During this period, many people sold gold, evidenced by its rangebound price through most of 2023. Was this a good move?
Examining the trend, gold sellers dominated when news indicated ongoing high inflation, often selling during large CPI increases or strong economic reports, particularly positive job reports. Conversely, gold buyers increased their purchases when inflation news was positive or indicated an economic slowdown.
The mainstream view suggests that persistent price inflation prompts the Federal Reserve to raise interest rates or keep them higher for longer. Higher interest rates create headwinds for gold since it is a non-yielding asset, leading investors to prefer yielding assets like bonds.
However, Maharrey finds it curious that investors consistently sold a traditional inflation hedge during the worst inflationary period in 50 years. Some of the gold price swings in recent months appear to be driven by traders anticipating
others; actions, rather than long-term trends or economic fundamentals. This “monkey see, monkey do” phenomenon was programmed into trading algorithms, creating short-term gains but neglecting long-term perspectives. Maharrey also questions golds role as an inflation hedge, noting that some investors consider it a “useless metal.” However, looking at the performance since June 2021, gold has
increased by about 29 percent, compared to a 12.3 percent rise in CPI, indicating a solid
inflation hedge.
For the full detailed Mike Maharreys article press ARTICLE
IMPORTANT NOTE: The information contains in this article for information purpose only and does not constitute investment advice or a recommendation to buy or sell.
A.G. Metals
Ami Gur