Daily Gold Market Report

Gold drifts marginally lower despite high Eurozone inflation readings
Barclays Bank sees rising global debt levels as a key driver for gold going into 2022

(USAGOLD – 12/2/2021) – Gold drifted marginally lower in early trading despite surging wholesale (+5.4%) and retail (+4.9%) inflation in Europe and mounting concern about the economic impact of the Omicron variant. It is down $3 at $1780. Silver is up 15¢ at $22.54. While press reports are blaming the higher than expected Eurozone readings on rising energy prices and supply bottlenecks, a good many see rising government debt levels and central bank stimulus measures as at the heart of the problem. Barclays Bank chief market strategist Mark Moser sees the rising global debt levels, in turn, as a key driver for gold going into 2022.

“I wouldn’t be surprised if, over the next 12 months, you see the gold price going up by another ten to 20 percent,” he says in an interview with Arabian Business, “I think with the deficit increasing so much during the Covid crisis, we’ve seen fiscal stimulus pretty much everywhere and that means the debt level is up around 20 percentage points, pretty much everywhere in the world. It means that interest rates are going to stay low for a long time, the Fed is talking until 2023 at least, and that means it’s a very good environment for gold.”

Chart of the Day

overlay chart showing price increase in percent for coal, oil and natural gas
Chart courtesy of TradingEconomics.com • • • Click to enlarge

Chart note: Concern is elevated that we might be in the middle of another energy crunch – a problem reflected in the price of coal, natural gas and oil, as shown in the chart. “Gas prices in Europe,” says Irina Slav in an article posted at the OilPrice.com website, “are breaking record after record. The U.K. is facing supply shortages reminiscent of the late 1970s winter of discontent. Chinese factories are shutting down because of power shortages, and the outlook is grim. In fact, it may be the first crisis of many.”

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