Published: 2022.08.03. Jeff Clark: Gold in Inflation and Recession

Jeff Clark: Gold in Inflation and Recession - Vista previa

Information portal Kitco News recently spoke with Jeff Clark. During the conversation, they discussed the policy of the US Federal Reserve and other events in the world.
“The Fed is a marketing machine, not necessarily a truth machine,” a senior precious metals analyst at GoldSilver.com said in an interview. “They will talk about bad news and try to keep the economy strong and encourage people and not cause panic among the population.”
According to the financial expert, the difference between yields on 10-year and 2-year US government bonds, also known as the yield curve, is an indicator of a recession: "Every time this number went negative, there was a recession after that," he explained. "This indicator has predicted every recession since 1980."
The difference between 10-year and 2-year yields is currently -0.22, according to the St. Louis Fed. "Whether we're in a recession or not, this is a very strong indicator that a recession is coming and we should all prepare for it," Clarke said.
Gold is one of Clark's favorite investments and serves as a safe haven during recessions. Recessions and inflation have generally been good for gold in the past, he said.
According to him, the fact that the yellow precious metal did not break out in the face of raging inflation is due to the fact that gold lags behind inflation in time: in the 1970s, the correlation between the development of the price of gold and the development of the consumer price index was very high. But in the second half of the 1970s, when inflation soared, there was a delay before the prices of gold and silver began to move. However, subsequently the prices of precious metals rose sharply.
But the price of gold, of course, is influenced not only by GDP and the consumer price index: “By and large, I look not only at the problem of inflation. I follow every crisis that pushes more and more investors into the gold market,” says Clark.