The Growing Risk Of Stagflation Bodes Well For Gold And Silver

2025-02-13 14:49:00 ET

Summary

• U.S. inflation expectations have surged over the past few months, and this has been a bullish driver for gold and silver.
• In December, the PCE rose at an annual rate of 2.6%, reinforcing the same message as the CPI - inflation remains persistently high and has been trending in the wrong direction in recent months.
• The persistent and rising inflation, coupled with a likely impending recession, is setting the stage for “ stagflation ” - a condition marked by high inflation, stagnant economic growth, and elevated unemployment.
• Since money supply expansion is the root cause of inflation, this renewed growth helps explain why inflation has remained persistently high and why gold and silver have surged over the past year.

By Jesse Colombo

U.S. inflation expectations have surged over the past few months, and this has been a bullish driver for gold and silver.

Yesterday, the U.S. Consumer Price Index came in hotter than expected, reinforcing those inflation concerns and raising the specter of stagflation as economic growth slows and layoffs increase ....

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