The last 50 years, we have seen gold, commodities, and inflation numbers move in cycles and in tandem together.
Though gold has picked up in recent years, make no mistake, the cycle between them is still intact.
If gold is leading the way, the rest should catch up subsequently.
Gold will likely remain high because of the easy money policy over the decades or the creation of off-balance debt. $Gold - main 2308(GCmain)$ $Gold - Aug 2023(GC2308)$ $E-Micro Gold - Aug 2023(MGC2308)$ $Invesco DB Commodity Index Tracking Fund(DBC)$
Based on past cycle performance, commodities may come into alignment with gold, meaning there is a chance for commodities to catch up with gold.
When that happens, inflation will pick up again.
The inflation data, such as the CPI or PCE, is usually a few months behind the commodity prices.
Therefore, the Fed has been in defense mode, combating inflation due to the weakness of the dollar, elevation of gold and firmness in commodities.
In a recent article, we connected the dots to help explain the factors contributing to the current high-interest rate environment and bank runs. We also provided insights into the risks and future opportunities that lie ahead using the 'Quantamental' approach.
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