Gold bounces back from Monday’s sell-off
’20 ounces of gold will still get you a pretty nice car’

(USAGOLD – 1/5/2022) – Gold bounced back nicely yesterday, recouping about half of Monday’s losses. This morning it is up another $5 at $1821. Silver is up 4¢ at $23.15. With the dollar weakening, inflation showing no signs of abating, and the omicron variant spreading rapidly, gold’s safe-haven appeal is beginning to show signs of revival.

“While money-printing is nothing new,” writes Inside Wall Street’s Laurynas Vegys in a piece posted at the Rogue Economics website, “the increase in the money supply to combat the after-effects of the COVID-19 pandemic and pay for the feds’ largesse is unprecedented. And it’s bullish for both gold and silver. Remember, these precious metals are the ultimate form of wealth insurance. They’ve preserved wealth through every kind of crisis imaginable. An ounce of silver buys you about the same amount of bread today as it did in Roman times. And, if you want a more recent example, 20 ounces of gold will still get you a pretty nice car, as it would have about half a century ago.”

Chart of the Day

Purchasing power of the U.S. dollar
(%, year over year, monthly)

Sources: St. Louis Federal Reserve, U.S. Bureau of Labor Statistics

Chart note: Erosion in the dollar’s purchasing power has begun to accelerate. The loss of purchasing power in and of itself will not surprise most readers, but the degree of change and the speed with which it occurred probably will.