Deflation may be fueling a gold bull

Financial Sense/ Staff

Graphic image of gold investor holding gold bar with three red-eyed bears in background“Gold is likely to be a beneficiary in a deflationary environment. One reason for this, [Wolf Research’s John] Roque noted, is that gold doesn’t cost anything to hold if rates are very low or negative. If this deflationary cycle plays out, Roque believes gold will make a new all-time high during this cycle.”

USAGOLD note:  Gold as a deflation hedge – prices decline and gold goes to an all-time high, according to John Roque. Deflation is not what the Federal Reserve wants, and certainly not what the White House wants. Yet, for the moment, the signs point in the direction of disinflation, at least, if not outright deflation.  Of course, that could change in a heartbeat.  It has in the past.  In the early 1920s, for example, Germany went through a deflationary period just before hyperinflation suddenly bubbled to the surface.

Image courtesy of the Visual Capitalist

Repost from 8-19-2019

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