Market Report

Inflation puts on, gold gains importance

For many years financial experts only reacted with a weary grin when someone dropped the term “inflation”. The inflation rate was at a record low, the economy suffered from a standstill, because hardly any consumer wanted to make major purchases. But now John Doe suffers almost daily from new shocks, for example, at the gas station or settlement of energy costs.

In the “Market & Trends” newsletter the bullion dealer “Emporium” provides clear facts about a trend that is bad for consumers, but good for gold: the inflation rate in Germany, the report reveals, has risen to a record high, the last time inflation was that high was three and a half years ago. In January goods became by 1.9 percent more expensive on average.

In the analysis, the reasons for rising inflation are called. Here first and foremost the higher oil price is responsible for the rising prices . Heating oil has become more expensive by 42.5 percent last year. However, energy prices are not included in the official inflation rate – taking account of energy prices, inflation would be even at 2.7 percent.

The massive increase in inflation makes it clear that gold is warranted more than ever. The inflation protection is gaining in importance because the inflation rate is again within the target area of ​​the European Central Bank. Now the ECB could actually end the monetary policy experiments.

But in the opinion of “Emporium” consumers will continue to pay the price, because they will not receive higher interest on their savings. In conjunction with the high inflation, a negative real interest rate results, which eats up the savings in the long term. Gold, however, protects against inflation and loss of purchasing power, which results from the zero interest rates.







About the author

Sebastian Wieschowski