If Inflation Doesn’t Rapidly Dissipate, Gold Prices Will Prove Undervalued

www.investing.com/analysis/if-inflation-doesnt-rapidly-dissipate-gold-prices-will-prove-undervalued-200626766

By Jesse Felder | Jul 06, 2022 12:45PM ET

This article has already been saved in your Saved Items

Volatility in the markets this year has largely been driven by the rise in inflation.

So if rapidly rising price pressures dissipate, taking inflation back below 2% quickly, then perhaps the moves in markets this year will be seen in hindsight as “filled with sound and fury, signifying nothing,” to quote Shakespeare.

Certainly, this is what markets are still discounting even after their recent ructions. Equity prices remain extremely elevated while gold prices remain relatively depressed. Episodes of rising inflation typically see just the opposite.

Gold To Dow Jones Industrial Average Ratio/CPI YOY

Therefore, if inflation proves more durable than markets currently discount, the recent volatility may be merely a prelude to a more significant repricing across several asset classes.

In fact, the level of CPI today already suggests that gold, relative to equities, may be just about as undeservedly cheap as it was a half-century ago, the last time inflation really became a problem.

And if inflation remains elevated, gold prices could have a terrific amount of upside ahead, especially relative to stock prices.

Earnings Hold, Markets Rebound; What's Next? By Francesco Casarella/Investing.com - Aug 09, 2022 1

Earnings show that companies (except for the banking sector) managed to pass on inflation almost entirely to the final customer Costs have increased considerably, pressuring...

Good News Is Bad News: Strong U.S. Jobs Gains Could Herald Economic... By Darrell Delamaide/Investing.com - Aug 09, 2022 6

U.S. added more than double the jobs forecast in July Fed policymakers have had to affirm strong action to tame inflation Bank of England is under attack as inflation rages The...

U.S. Stock Rally Faded, NVIDIA’s Warning, Oil Rebounds, Gold Above... By Ed Moya - Aug 09, 2022 1

With persistent inflation and a strong labor market, the Fed is on a clear path to raise rates. This week is all about inflation and many traders are expecting to see the inflation...

Add a Comment

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:

Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

I have read Investing.com's comments guidelines and agree to the terms described.

I Agree

Write your thoughts here

Are you sure you want to delete this chart?

Delete Cancel

Post

Post also to:

Replace the attached chart with a new chart ?

Replace Cancel

1000

Comment Guidelines

Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.

Please wait a minute before you try to comment again.

Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.

Comments (2)

Muhammad Shakir Jul 07, 2022 2:56PM ET

Follow this post

Unfollow this post

Save

Saved. See Saved Items.

This comment has already been saved in your Saved Items

Block User

send me smol money

0 0

Report

longshot966 Jul 07, 2022 12:26AM ET

Follow this post

Unfollow this post

Save

Saved. See Saved Items.

This comment has already been saved in your Saved Items

Block User

agreed but market often respond to rose tinted central bank statements that reflect hope and less of reality.. let's be frank.most of the inflationary pressures come from the war and market disruptions.. interesting road ahead when rates add pressures to an already pressured market.. rates don't deliver world peace and a resumption of trade..and we pretend these nuggets of weak freight and reduced bottlenecks will deliver sporadic shifts that the markets celebrate like the end of inflation

2 0

Report

<div id="comment">
				<div class="comment js-comment" data-comment-id="{commentID}" id="comment-{commentID}" data-user-id="202507681">
    <div class="mainComment js-content">
       <div class="commentInnerWrapper">
        <a href="{userLink}" class="js-user-link"><img src="{userImage}" width="33" height="33" alt="{usernameAlt}" class="img" onerror="this.src='https://i-invdn-com.investing.com/defaultUserMaleTmp.png';"></a><div class="commentBody">
                					<span class="commentUsername">
                    	<a href="{userLink}" class="js-user-link js-user-name">{username}</a>
					</span>
                                <span class="js-date" comment-date="{dateFormat}" comment-date-formatted="{dateFormatted}" title="{dateTitle}">Just Now</span>
                <div class="commentDropDown js-commentDropDownWrapper " data-user-id="202507681" data-cid="{commentID}">
	<a href="javascript:void(0);" class="threeDotsIconSmall js-thinDropdownArrow"></a>
	<div class="tooltipPopup commentActionsPop noHeader js-commentDropDownOptions displayNone">
		<div class="addRow js-option share">
			<a href="javascript:void(0);" class="js-commentSharePopup" data-cid="{commentID}" data-curl="{commentLink}"><span class="smallShareIcon middle"></span>Share</a>
		</div>

<div class="js-option addRow follow">
            <div class="js-follow-post-button">
                <span class="alertfollowIcon middle"></span>Follow this post            </div>
            <div class="js-unfollow-post-button displayNoneImp">
                <span class="alertUnfollowIcon middle"></span>Unfollow this post            </div>
        </div>

<div class="addRow js-option save">
		<a href="javascript:void(0);" class="js-save-item-btn" data-item-type="comments" data-item-id="{commentID}">
			<i class="saveItemBigIcon middle"></i>
			Save		</a>
	</div>
	<div class="addRow saveItemsConfirmation noHover displayNone js-saveItemResult">
		
<div class="content js-saveItemSuccess displayNone">
	<span class="mediumGreenSuccessIcon"></span><span>Saved. See <a href="/members-admin/saved-items" target="_blank">Saved Items</a>.</span>
	<a href="javascript:void(0);" class="bugCloseIcon js-close"></a>
</div>
<div class="content js-saveItemAlreadySaved saveItemAlreadySaved displayNoneImp">
	<span>This comment has already been saved in your <a href="/members-admin/saved-items" target="_blank">Saved Items</a></span>
	<a href="javascript:void(0);" class="bugCloseIcon js-close"></a>
</div>
	</div>

<div class="addRow js-option blockUser js-block-option" data-comment-id="{commentID}"  data-user-id="202507681">
			<a href="javascript:void(0);">
				<span class="blockIcon middle"></span>Block User			</a>
		</div>
				<div class="addRow shareButtons js-sharePopup displayNone">
			<div class="js-shareComment"><span class="js-shareCommentSpan"></span></div>
		</div>
	</div>
</div>
                 <div class="commentAuthor js-comment-by-author"><span class="commentAuthorIcon"></span>Author's response</div>             </div>
		<div id="commentText-{commentID}" class="js-text-wrapper commentText withImage">
							<div id="commentBigChart{commentID}" class="commentBigChart js-comment-chart" onclick="openViewChartPopup('{commentID}')">
					<img src="https://d1-invdn-com.investing.com/comments_images/{commentImage}" alt="{commentAlt}">
					<i class="newMagnifyChartIcon"></i>
				</div>
						<span class="js-text">{commentContent}</span>
			<div class="clear"></div>
							<div class="commentButtons js-not-master-user">
					<a href="javascript:void(0)" class="reply js-reply-btn" data-real-parent-id="{commentID}" data-to-user-name="{username}" data-to-user-id="202507681">Reply</a>
					<div class="inlineblock likeDislikeBox js-like-dislike-box" data-item-id="{commentID}">
	<input class="js-like-checkbox" type="checkbox" name="option" value="Yes" id="like_{commentID}">
	<label for="like_{commentID}" class="like" title="I agree"></label>
	<span class="numOfLikes js-like-count lighterGrayFont">0</span>
	<input class="js-dislike-checkbox" type="checkbox" name="option" value="No" id="dislike_{commentID}">
	<label for="dislike_{commentID}" class="dislike" title="I disagree"></label>
	<span class="numOfDislikes js-dislike-count lighterGrayFont">0</span>
</div>

<div class="reportComment js-flag float_lang_base_2">
                            <a href="javascript:void(0);" id="commentFlag_{commentID}">
                                <span class="reportCommentIcon middle"></span><span class="inlineblock middle">Report</span>
                            </a>
                        </div>
                    				</div>
					</div>
	   </div>
	</div>
	</div>			</div>
			<div id="reply">
				
    <div class="commentReply js-comment js-comment-reply" data-comment-id="{commentID}" id="comment-{commentID}" data-user-id="">
		<div class="commentInnerWrapper"><a href="{userLink}" class="js-user-link"><img src="{userImage}" width="33" height="33" alt="{usernameAlt}" class="img" onerror="this.src='https://i-invdn-com.investing.com/defaultUserMaleTmp.png';"></a><div class="commentBody js-content">
            				<span class="commentUsername">
					<a href="{userLink}" class="commentUsername js-user-link js-user-name" onMouseOver="">{username}</a>
				</span>
                        <span class="js-date" comment-date="{dateFormat}" comment-date-formatted="{dateFormatted}" title="{dateTitle}">Just Now</span>
			 <div class="commentAuthor js-comment-by-author"><span class="commentAuthorIcon"></span>Author's response</div> 			<div class="commentDropDown js-commentDropDownWrapper " data-user-id="" data-cid="{commentID}">
	<a href="javascript:void(0);" class="threeDotsIconSmall js-thinDropdownArrow"></a>
	<div class="tooltipPopup commentActionsPop noHeader js-commentDropDownOptions displayNone">
		<div class="addRow js-option share">
			<a href="javascript:void(0);" class="js-commentSharePopup" data-cid="{commentID}" data-curl="{commentLink}"><span class="smallShareIcon middle"></span>Share</a>
		</div>

</div>
		<div id="commentText-{commentID}" class="js-text-wrapper commentText withImage">
							<div id="commentBigChart{commentID}" class="replyBigChart displayNone js-comment-chart">
					<img src="https://d1-invdn-com.investing.com/comments_images/{commentImage}" alt="{commentAlt}">
					<i class="newMagnifyChartIcon"></i>
				</div>
				<span id="commentSmallChart{commentID}" class="commentSmallChart pointer js-comment-chart" onclick="openViewChartPopup('{commentID}')">
                    <img src="https://d1-invdn-com.investing.com/comments_images/{commentImageSmall}" width="116" height="52" alt="{commentAlt}">
                    <span class="chartMagnifyOverlay displayNone"></span>
                    <span class="searchGlassIcon chartMagnify displayNone"></span>
                </span>
						<span class="js-text">{commentContent}</span>
			<div class="clear"></div>
							<div class="commentButtons js-not-master-user">
					<a href="javascript:void(0)" class="reply js-reply-btn" data-real-parent-id="{commentID}" data-to-user-name="{username}" data-to-user-id="">Reply</a>
					<div class="inlineblock likeDislikeBox js-like-dislike-box" data-item-id="{commentID}">
	<input class="js-like-checkbox" type="checkbox" name="option" value="Yes" id="like_{commentID}">
	<label for="like_{commentID}" class="like" title="I agree"></label>
	<span class="numOfLikes js-like-count lighterGrayFont">0</span>
	<input class="js-dislike-checkbox" type="checkbox" name="option" value="No" id="dislike_{commentID}">
	<label for="dislike_{commentID}" class="dislike" title="I disagree"></label>
	<span class="numOfDislikes js-dislike-count lighterGrayFont">0</span>
</div>

Are you sure you want to delete this chart?

Delete Cancel

Post

Replace the attached chart with a new chart ?

Replace Cancel

1000

Comment Guidelines

Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.

Please wait a minute before you try to comment again.

I feel that this comment is:

Spam

Offensive

Thank You!

Your report has been sent to our moderators for review

Central Banks

Interest Rates

Next Meeting

FED

2.50%

Sep 21, 2022

ECB

0.50%

Sep 08, 2022

BOE

1.75%

Sep 15, 2022

SNB

-0.25%

Sep 22, 2022

RBA

1.85%

Sep 06, 2022

BOC

2.50%

Sep 07, 2022

RBNZ

2.50%

Aug 17, 2022

BOJ

-0.10%

Sep 22, 2022

CBR

8.00%

Sep 16, 2022

RBI

5.40%

Sep 30, 2022

PBOC

3.70%

BCB

13.75%

Sep 21, 2022

US 30	32,748.0	-26.4	-0.08%
US 500	4,117.2	-5.3	-0.13%
Dow Jones	32,774.41	-58.13	-0.18%
S&P 500	4,122.47	-17.59	-0.42%
Nasdaq	12,493.93	-150.53	-1.19%
S&P 500 VIX	21.77	+0.00	+0.00%
Dollar Index	106.162	-0.090	-0.08%

Crude Oil WTI	89.81	-0.69	-0.76%
Brent Oil	95.72	-0.59	-0.61%
Natural Gas	7.849	+0.005	+0.06%
Gold	1,805.15	-7.15	-0.39%
Silver	20.367	-0.115	-0.56%
Copper	3.5650	-0.0242	-0.67%
US Soybeans	1,426.00	-2.50	-0.18%

SPDR S&P 500	411.35	-1.64	-0.40%
iShares Russell 2000	190.19	-2.63	-1.36%
Invesco QQQ Trust	317.08	-3.63	-1.13%
Direxion Daily Junior Gold Miners Bull 2X Shares	37.64	-0.69	-1.80%
iShares Silver	18.93	-0.10	-0.53%
ProShares Ultra VIX Short-Term Futures	10.03	+0.12	+1.21%
ProShares UltraPro QQQ	33.73	-1.20	-3.44%

Apple	164.92	+0.05	+0.03%
Alphabet A	116.63	-0.67	-0.57%
Tesla	850.00	-21.27	-2.44%
Amazon.com	137.83	-1.58	-1.13%
Netflix	229.94	-3.55	-1.52%
Meta Platforms	168.53	-1.72	-1.01%
Bank of America	33.92	+0.43	+1.28%

If Inflation Doesn’t Rapidly Dissipate, Gold Prices Will Prove Undervalued

Related Articles