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Inflation and low interest rates are a favorable growth environment for gold and silver

March 18, 2021 by
Kimmo Ko
  • Coindesk: Inflation may return unexpectedly like in the 60s
  • BullionVault: We are living in the decade of silver
  • Stansberry Research: It's time to buy silver
  • FXStreet: Is it gold's time in the spotlight again soon?

Coindesk: Inflation may return unexpectedly like in the 60s

Damanick Dantes believes that inflation could surprise and rise to double-digit figures - just like it did in the 1960s. This prediction is also supported by forecasting firm Pantheon's Ian Shepherdson. Both believe that the slow price development of recent years has made investors complacent.
In the 60s, the world was in a similar situation: at that time, the costs of the Vietnam War and President Lyndon B. Johnson's spending caused a massive spike in inflation - which was further exacerbated by fluctuations in oil prices. In February 1975, inflation was as high as 11.7%. Today, President Biden's massive $1.9 trillion stimulus package and the central bank's money printing could cause a similar spike.
Investors seem to underestimate this risk just as they did in the 60s. And those who do not prepare for rising inflation in their investment activities will suffer in the coming years and decades.
Read  full article in English / March 16, 2021, Damanick Dantes

BullionVault: We are living in the decade of silver

Strategic Investments in Dan Amos values gold but does not allow it to overshadow silver. He believes that the value of gold will multiply in the coming years, but silver's performance is likely to be even better—at least in percentage terms. Dan believes that silver's bear market would have already begun if it were to come after the price peak in August 2020. Instead, the price of silver has remained between €19.30 and €23.50/oz.
Silver has value both as a monetary metal and as an industrial metal, unlike gold. Therefore, silver, regarded as a green metal, stands to benefit significantly from the upcoming economic recovery and reflation trade. The prices of silver and gold correlated very strongly until 2018, after which purely monetary gold left silver behind in a slow and deflationary global economy.
But now Amos predicts that President Biden's stimulus package will cause a spike that could raise inflation to 3 or even 5%. The U.S. Federal Reserve is unlikely to raise interest rates, which would lead to rising inflation resulting in a negative real interest rate. If this prompts investors to sell their deflation-benefiting holdings and buy gold and silver, the prices of precious metals would have to rise significantly to match the resulting imbalance of supply and demand.
Silver is a popular metal among younger investors and part of the global reflation trade, so Amos believes it will perform very well in the upcoming economic environment. The value of silver could rise to as much as €42/oz in the coming years.
Read full article in English / March 8, 2021, Dan Amos

Stansberry Research: It's time to buy silver

Stansberry Research's Daniela Cambone interviews Robert Kiyosaki, the author of the bestseller Rich Dad, Poor Dad, and entrepreneur about gold and silver, Bitcoin, and the recent silver short squeeze. Their discussion starts from Robert's tweet, where he claims that the Biden administration is changing the rules of its central bank and will ultimately destroy the dollar. Robert elaborates on his claim by stating that Biden is clearly trying to increase the money supply in the economy: the central bank is creating new money directly for consumers, whereas in the old system, similar stimulus would have required creditworthiness. It is highly likely that investors will soon abandon the dollar and move to assets that preserve value, such as gold, silver, and Bitcoin. After much speculation, Elon Musk and Tesla invested in Bitcoin, which could lead to a domino effect. Robert comments on the short squeeze that occurred in February via Reddit and explains that it has drawn attention to market manipulation that keeps precious metal prices low. While the rise in GameStop's price was artificial, the silver short squeeze has real effects on actual companies. For this reason, he bought up all the silver he could get his hands on at that time. In the end, Robert encourages investing creatively and seeking opportunities. Watch full video in English / February 16, 2021, Daniela Cambone

FXStreet: Is it gold's time in the spotlight again soon?

Trade Nation's CEO Stuart Lane believes that gold will thrive again soon. Gold reached a surprising peak of €1,742.50/oz seven months ago. The main reason for the rise was the stimulus measures taken by governments against the coronavirus pandemic, which raised concerns about rising inflation. However, gold has since fallen 18% from that record. Still, Stuart believes that gold will rise again soon. In this article, he explains why.
According to common belief, the price of gold is inversely related to both the dollar and the stock markets. When their situation is poor and interest rates are low, investors protect their stock portfolios with gold. Stuart reminds us that while this belief is mostly true, their actual relationship is more complex. He advises monitoring gold's progress when predicting the real interest rate, which is the interest rate adjusted for inflation.
Currently, inflation has hit several essential commodities, although many major inflation indices have not yet noticed this. The U.S. Federal Reserve has also announced that it will allow inflation to rise above its 2% target rate. Inflation is rising, and central banks do not want to raise interest rates. All of this supports the rise of gold.
Read full article in English / 15.3.2021, Stuart Lane'}

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