The above chart is and end-of-day chart from yesterday. Gold closed at $1484.

At 11:30 AM Central, gold was at $1520, up $36 on the day.

Gold vs Copper

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What's the Message?

Stephanie Pomboy at Macro Mavens nails it.

Gold Not an Inflation Hedge

As I have pointed out numerous times, and contrary to popular belief, gold is not an inflation hedge. Gold fell from $800 to $250 with inflation every step of the way.

Rather, gold is a measure of faith in central banks that everything is under control.

Gold vs Faith in Central Banks

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RECOMMENDED ARTICLES

Everything Under Control?

Clearly not, and I have easy-to-understand proof.

  1. Hello Treasury Bears: 10-Year Bond Yield Approaching Record Low Yield
  2. Negative Yield Debt Hits Record $15 Trillion, Up $1 Trillion in 2 Business Days
  3. US Treasury Declares China a Currency Manipulator Under Orders From Trump

If you believe gold tracks inflation or is some kind of inflation hedge, you need to think again.

Only in hyperinflation or its mild form, stagflation, is gold an inflation hedge. But even then, both are synonymous with central bank stress.

Hello Treasury Bears

Let me make it simple: It's the debt, stupid!

The global economy is choking on debt as central banks are determined to have more of it.

Inflation? Forget about it. The bubbles are proof we "had" inflation.

The Bond markets says something else is coming up.

Mike "Mish" Shedlock

Gold is Not a Function of the US Dollar Nor is Gold an Inflation Hedge

Swings in the US dollar have no long-term impact in the price of gold. Nor is gold an inflation hedge.

Central Bank Group Think: Convince the Public More Inflation is Coming

Chicago Fed chief Charles Evans is worried about the lack of inflation primarily because he is clueless about where to find it. As further proof of his economic illiteracy, Evans says "Low inflation expectations keep inflation down".

Gold’s Message

Steen Jakobsen, Saxo Bank CIO and chief economist, emailed a chart of gold last week with his comments on what the chart means. I meant to comment on his comments at the time, but will do so now.

Central Bank Hubris Bubbles to the Surface

Albert Edwards at Society General commented today on Central Bank Hubris, deflation, and the flattening of the US yield curve. Here are some email snips.

Reader "Worried about Inflation, Deflation, Stocks, Bonds, Gold, Everything"

A recently retired reader friend is worried about, inflation, deflation, bonds, stocks, banks, and gold.

Central Banks Puzzled as Global Inflation Hits Lowest Level Since 2009: Solving the Puzzle

Yesterday, I commented on “transitory” factors holding down inflation. Today, the Wall Street Journal reports Global Inflation Hits Lowest Level Since 2009.

Gold and Bitcoin Hype Hits Stratosphere (Part 1)

The hype and nonsense Bitcoin and gold has blasted through the troposphere into the stratosphere. I suppose hype could get higher. The next target is the mesosphere.

Central Banks Rethink 2% Inflation Target (In the Wrong Direction of Course)

If Central Banks wanted to make a positive impact on the global economy, they would abolish themselves and let the free market set rates.

Gold's vs the US Dollar: Correlation Is Not What Most Think

Gold is not as correlated to the US dollar as most think.