from Zero Hedge
With The Wall Street Journal once again playing down any precious metals strength and Goldman explicitly saying “sell,” RBC Capitalo Markets’ Tyler Broda and Alexandra Slattery are considerably more positive…
Retro Gold – Are we heading back to the 1970s?
Gold is often considered as a strong hedge for inflationary environments. The 1970s are the most commonly cited example of this phenomenon (in the US at least). Our analysis suggests that inflation is only part of the equation. As US inflation begins to re-emerge, and monetary policy around it continues to remain accommodative, the potential for lower real interest rates, at least over the medium-term, is increasing. In our view, this could create similar dynamics for the gold market as what occurred in the mid-to-late 1970s.