MRB on CNBC – July 19, 2019
“Gold is often thought of as an inflation hedge, yet the two have not been correlated over the past 20 years,” Phillip Colmar, founding partner at MRB Partners, said in a note earlier this month. “Instead, gold thrives and core consumer price inflation tends to rise in an environment where policymakers are deliberately and persistently keeping policy rates and bond yields anchored below nominal GDP growth (i.e. fueling growth and inflation with an easy policy), which was the case of the 1960s and 1970s.”
Colmar added we view the recent rise in gold prices as a market-based signal that central banks are providing more reflation (via lower interest rates and bond yields) than is currently necessary to support the global economy.”