Gold: Inflation expectations to push the yellow metal up against USD – iTrustCapital

Tim Shaler, Economist-in-Residence at iTrustCapital, shared with FXStreet’s users his thoughts about the current environment in the gold market. As he expects inflation to rise, the yellow metal should act as a great diversifier for long-term investors.

Key quotes

"One of the great promises of the Euro was that no government could mandate the printing of money.  Historically, governments would borrow money and then many years later pay for that borrowing with inflation – thereby reducing the real cost of the repayment.”

“In the US, the inflation of the 1970s came 30 years after the 1940s, when War Bonds were coming due. With talk of another $1 trillion in stimulus in the US and the prospect of a total over 2 trillion Euro in short and long-term stimulus spending in Europe, gold investors are seeing the incentive for future inflation going up.”

“Gold is assumed by asset allocators to have a negative correlation to US large-cap stocks – making gold a GREAT diversifier for most investors' long-term portfolios. It is no wonder gold prices are going up versus the dollar and other currencies."