Page 27 - Bullion World Issue 11 March 2022_Neat
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Bullion World | Issue 11 | March 2022
US inflation recently reached levels, not seen since the 1980s and a multitude of factors has contributed to
this. Include supply chain challenges in the aftermath of the pandemic,labor shortages and an unprecedented
combination of monetary and fiscal stimulus to do not be imperative covid on economics, keeping consumption
levels high and fueling a surprise rally.
The best time to buy a
CombiBarTM was 10 years ago.
The second best time is now.
*Rolling 24-month correlation coefficients between log-returns in the average gold price and changes in CPI, average
breakeven and average real treasury yields (inflation indexed). Observations within the grey box are not statistically significant,
at a 10% significance level.
Source: Metals Focus, Bloomberg
The last 20 years rolling correlation coefficient between gold, and both real actual, as well as inflation expectation,
attempted to be statically insignificant at times counterintuitive, for example suggesting that inflation was bad for
gold. That US policy rates will rise to control inflation have therefore capped in western interest in gold.
Source: Bloomberg
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