Gold ETFs have consolidated in a trading range following last year’s record-breaking run over $1,900 an ounce. [Why Gold ETFs Still Make Sense]
The Casey Research analysts think the bull market in gold is intact with central banks keeping interest rates low. Despite a low Consumer Price Index, easy monetary policies push real rates below zero. If inflation heats up, real rates would fall even more.
“In other words, interest-rate fluctuations alone aren’t important; it’s how the rate interacts with the inflation rate. If inflation simultaneously rises and keeps the real rate negative, we should expect gold to remain in a bull market,” the analysts wrote.
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Full disclosure: Tom Lydon’s clients own GLD.