“Well, slower economic growth and higher inflation due to the spread of the Delta variant are good news for gold. It brings us closer to a stagflationary environment, which should be welcomed by the yellow metal. Although gold doesn’t always protect against inflation, it served as a good inflation hedge during the 1970s, so we could reasonably expect similar performance during the potential 2020s stagflation.”
USAGOLD note: Sieron offers the same historical analogy we have since burgeoning stagflation became a general concern over the past several weeks: Gold performed well during the last stagflation in the 1970s. Stocks, we will add, were a non-starter finishing the decade about where they started.
Gold, silver, and stocks
(1970s, in percent)
Chart courtesy of TradingView.com • • • Click to enlarge