Higher Inflation Is Here To Stay – What Does That Mean for Gold?

Phil Carr
Updated: Mar 23, 2022, 14:26 UTC

It’s official: Central banks across the world are behind the curve on battling inflation and no matter what actions they take now, it will be nowhere enough to quell rising inflationary pressures.

Higher Inflation Is Here To Stay – What Does That Mean for Gold?

In this article:

March has been a monumental month for monetary policy as governments and central bankers across the world ramp up the fight against rapidly surging inflation while acknowledging that inflationary pressures could persist for years, driven in part by the crisis in Ukraine.

Just a few months ago, 2022 looked set be the year of global recovery, with the U.S, China and Europe returning to pre-pandemic levels of growth. However, the world is now in a completely different place from what it was just a month ago.

The current fundamental backdrop, combined with the largest war on European soil for almost 80 years, economic impact of sanctions on Russia and the return of Coronavirus to China – once again threatens global supply chains, enviably fueling inflation expectations to rise further.

This ultimately presents huge bullish tailwinds for the entire Commodities sector and boosts demand as traders pivot into assets that are known to be reliable hedges against risk, inflation and economic shock.

Already within the first quarter of 2022 – a total 27 Commodities ranging from the metals, energies to soft commodities have tallied up astronomical double to triple digit gains.

And that leads me onto Gold, which right now is hovering around the $1,920 level.

Interestingly, that’s the same level Gold was at near the start of March. But also the same level Gold was at two years ago in March 2020 – just before prices surged to new all-time highs.

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

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Phil Carrcontributor

Phil Carr is co-founder and the Head of Trading at The Gold & Silver Club, an international Commodities Trading, Research and Data-Intelligence firm.

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