Gold drifts lower overnight despite raging inflation in Europe
BIS’ Carstens warns we are heading into ‘a new inflationary era’

(USAGOLD – 4/6/2022) – Gold drifted lower overnight despite the continuing sharp sell-off in global bond markets and raging inflation in the European Union. It is down $3 at $1923. Silver is down 15¢ at $24.27. Overnight, the Eurozone reported producer prices rising 31.4% over the past year – a record increase with energy costs rising a gut-wrenching 87.2%. Though that level of inflation is not expected elsewhere (at least in the immediate future), it does serve as a warning of just how virulent the inflation building in the economy has become. It also raises questions about central banks’ ability to keep it from suddenly running out of control.

Agustin Carstens, general manager of the influential Bank for International Settlements, says we are heading into “a new inflationary era,” according to a Financial Times report this morning. “A generation of society, workers and business managers,” he says, “who had never seen meaningful inflation – at least in advanced economies – are learning that rapid price rises are not merely the stuff of history books.” He warns that “the forces behind high inflation could persist for some time. Central banks will need to adjust, as some are already doing…No one wants to repeat the 1970s.”

Eurozone Producer Prices
Source: tradingeconomics.com