Correction to June 24th, 2020
Corrects the U.S. core inflation measure used in the chart.
Gold’s rise to its highest in 8 years reflects at least some simmering concerns among investors that an inflationary pulse will eventually emerge from the massive monetary and fiscal stimuli used around the world to support pandemic hit economies. And yet the overwhelming concern at central banks is deflation - as seen in the St. Louis Fed's deflation risk monitor at its most alarming since the Great Financial Crisis 12 years ago. Friday's reading of the Fed's favoured inflation measure - core PCE - is also expected to see the annual rate fall further to less than half the Fed's 2% target in May. If inflation is indeed due for a resurgence in future, it will take X-ray spex to see through the deflationary angst of the moment.
Chart by Ritvik Carvalho and commentary by Mike Dolan
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