|

Could stagflation trigger Gold’s next big move? [Video]

It's official: Global trade wars are back and this time around, their back with more vengeance than ever before! 

When Donald Trump won last year’s election, there was a sense among some western diplomats in Washington that their government knew how to handle a President who in his first term gained a reputation for being unpredictable and erratic. 

Within Trump's first 50 days in office he has already stirred up more uncertainty in the global economy and financial markets compared to any other President in history. 

It's fair to say that the world underestimated just how disruptive a Trump 2 Presidency would be. 

Fast forward seven weeks to the present day and there’s no denying that Trump's hyper-focus on tariffs since taking office in January has rattled investor, consumer and business confidence – leading to a foregone conclusion that “A New Era of Stagflation Could Be On Way”. 

Interestingly, “Stagflation” – the combination of a global economic slowdown and a resurgence in inflation – is one of the most searched terms on Google right now. 

Concerns over Stagflation have come as President Donald Trump seems determined to slap tariffs on virtually anything that comes into the country at the same time that multiple indicators are pointing to a pullback in activity. 

In his speech before Congress on 4 March, President Trump the self-proclaimed Tariff Man – declared he was only “just getting started”. 

There are no prizes for guessing that Precious Metals like Gold, Silver, Platinum and Palladium tend to be the big winners in inflationary environments. Almost by definition, when inflation accelerates, so does the prices of Precious Metals. 

You only have to take a look at the markets to realize that traders have already begun pricing in the dual threat of a resurgence in inflation and slower growth by dumping high-risk assets such as Equities, the U.S Dollar and Cryptocurrencies and in return – piling into Gold at one of the fastest paces seen since the Global Financial Crisis in 2008. 

According to data tracked by GSC Commodity Intelligence – February saw a whopping $4.9 billion flow into Gold – the ever highest on record! In financial market terms, it almost seems as if, President Trump's “Make America Great Again” pledge has rapidly transformed into a “Make Gold Great Again” movement. 

Whichever way you look at it, one thing is clear. Gold and Precious Metals as a whole – always perform the best under a Trump administration. And we still have another four more years to go of a Trump 2 Presidency! 

That’s welcoming news for the bulls, but painful for anyone sitting on the sidelines, who must now decide how much FOMO they can handle. 

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

Author

Phil Carr

Phil Carr

The Gold & Silver Club

Phil is the co-founder and Head of Trading at The Gold & Silver Club, an international Commodities Trading Firm specializing in Metals, Energies and Soft Commodities.

More from Phil Carr
Share:

Editor's Picks

EUR/USD hovers around nine-day EMA above 1.1800

EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback. 

Gold sticks to gains above $5,000 as China's buying and Fed rate-cut bets drive demand

Gold surges past the $5,000 psychological mark during the Asian session on Monday in reaction to the weekend data, showing that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Federal Reserve expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal. 

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels.

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.