Afternoon Update

Gold spikes lower, then higher in reconsideration of inflation impact
‘Safe-haven flows are starting to come gold’s way.’

(USAGOLD – 10-13-2021) – Gold pushed as much as $15 higher in overnight trading on the same concerns overhanging markets for the past couple of weeks – the developing credit crisis in China, an energy crunch that appears to be gaining momentum, and the overarching prospect of global stagflation. Upon release of this morning’s CPI report, which came in at a 5.4% annualized inflation rate, it promptly gave up those gains in what looked to be, as things turned out, a knee-jerk trading program reaction. After a short period of reconsideration, the market then reversed course, ending up $31 on the day at $1793. Silver jumped 46¢ at $23.11.

“Inflation expectations mixed with global growth concerns have made many investors nervous that the business and the consumer will be much weaker in the second half of 2022,” OANDA’s Edward Moya told Reuters. “Safe-haven flows are starting to come gold’s way.” We would add that this is the first time in a long while we can recall an inflation report invoking a robust and direct response in the gold market. The advance sends a clear signal that investors are beginning to question the transitory inflation thesis. The Wall Street Journal ran a headline at its website this afternoon captuing the moment: Persistent inflation ripples through U.S. economy. Last, in case you missed it, gold is once again knocking at $1800’s door.

Gold price

line chart showing gold 10-13-2021
Chart courtesy of • • • Click to enlarge



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