"Essentially, the market is questioning whether the Fed is really going to do what it intends to do." According to him, the Federal Reserve is facing a difficult decision. If it raises interest rates, it could trigger a recession.
This, in turn, may affect the price of gold. “There is a very big difference now between what we saw in mid-2011 when gold peaked at $1,920 an ounce and then started to fall,” Wagner said. “For about three years, gold fluctuated back and forth between 1820 and 1537 US dollars. This happened as a result of "quantitative easing" in the first, second and third quarters. And when they completely stopped "quantitative easing", we broke below $1,500 an ounce. If we look at the relative price today, $1,800, it hasn't come down much considering what we saw last time "quantitative easing" ended.
Wagner remains skeptical about the success of the US government and the Federal Reserve in the fight against inflation. Moreover, according to him, today's inflation is caused by a shortage in the supply of certain goods, and it is impossible to combat it with the help of monetary policy.
Regarding gold and its actual role as a hedge against inflation and stock volatility, he had this to say: “I think a different scenario is playing out right now. There is a new variable, and that is the real yield on US Treasuries and bonds. The market is always looking ahead, anticipating what the interest rate will be in six months. And so we saw 30-year bonds and 10-year bonds. We have seen them grow aggressively and actually offer real returns of 2%, 2.5%. But gold does not earn interest. And this fact slightly overshadows the prospects for the yellow precious metal as a defensive asset.”