Gold Approaches $700

Gold | Inflation

Gold closed at $695.80 today according to Bloomberg.  Peter Grandich, editor of the Grandich Letter, wrote (subscription required):

A near perfect storm has aligned both technically and fundamentally for gold.  A test of the 2006 highs around $735 is not a question of if, but when.

A 6 month chart of gold shows the nice run it has had lately.

In a note today, Michael Pento, Senior Market Strategist at Delta Global Advisors, explains why gold is a much better inflation hedge than Treasury Inflation Protected Securities (TIPS).  TIPS returns are based on the consumer price index (CPI) which woefully understates inflation: “Adding such a CPI figure to the anemic nominal TIPS yield will never allow investors to get ahead in real terms”, he wrote.

Similar Posts