| “None of gold’s short-term gyrations will end up being significant in light of the more-fundamental factors driving the price over the longer term. In my opinion, the brief reaction to the Omicron variant will go the way of all geopolitical, or in this case geo-medical, drivers. It will fade away and leave the price generally where it was beforehand.
“The same goes for the market reactions to Powell’s reappointment and his indications today that the QE tapering schedule might be accelerated.
“The primary drivers for gold will be the simple fact that the Fed can’t get very far down the path toward policy normalization without either collapsing financial markets or running into the brick wall of debt service costs. Once investors realize this, likely when the Fed either has to turn back from tapering or institutes the first rate hike, gold will take off.”
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| “One potential danger for gold in the short term would be a CPI number that moderates from the current high levels. I believe inflation will remain high, but may come back a bit from the sharp increases we’ve just seen.”
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Again, even if the November CPI coming out on December 10th shows a significant moderation in inflation, we’re still going to see much higher price pressures going forward.
And as I indicated in my email, the Fed will be powerless to fight it with higher interest rates. Any sustained rate-hike campaign will pop the bubbles in equities, bonds and real estate, not to mention send federal debt service costs spiraling toward $1 trillion every year.
It won’t happen. Importantly, once the markets begin to understand this in the months just ahead, the price of gold will soar.
We’re near the end game, and this is the time to make sure we’re positioned for it.
On that note, the timing is perfect for our blockbuster year-end issue of Gold Newsletter....
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