Gold pushes higher as part of generally tepid reaction to Fed minutes
JP Morgan sees potential for 30% to 40% more upside in commodities

(USAGOLD – 4/7/2022) – Gold pushed higher in early trading as part of a generally tepid market reaction to yesterday’s sneak preview of Fed rate and balance sheet plans. It is up $7 at $1933. Silver is up 5¢ at $24.56. In a Bloomberg report posted this morning, JP Morgan says that commodity allocations could conceivably rise to 1% of total financial assets as investors look to hedge inflation. That would imply, says the firm, “another 30% to 40% upside for commodities from here.” According to Van Eck’s Ima Casanova, though gold has lagged the rest of the commodities complex over the past several months, that might be about to change.

“What we’ve seen in previous inflationary cycles,” she says in an recent interview at Seeking Alpha, “is that gold tends to underperform other commodities in the first part of the inflationary cycle. And then in the second part of the cycle, which we could be entering or closer to entering, gold then outperforms other commodities. So it’s almost like the markets take a little time to really digest inflation, to really believe that inflation is here, that it’s elevated and it’s going to be here for a while before it fully prices in and it reflects in gold’s performance.”

Gold and the S&P Goldman Sachs Commodity Index

Chart courtesy of TradingView.com