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Inflation is prone to delta variant. Is it good news for gold?

Sunshine Profits/Arkadiusz Sieron/8-24-2021

“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)

overlay line chart showing gold, silver and stocks 1970-1979

Chart courtesy of • • • Click to enlarge

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