Central Banks Continue to Stockpile Gold as Recession Looms
The comments below are an edited and abridged synopsis of an article by Arsenio Toledo
Despite claims from central banks and governments that they have avoided a greater global economic meltdown, inflation is still on the rise and recession is still on its way—and central banks are preparing for it by stockpiling even more gold.
This is according to Lynette Zang, chief market analyst of ITM trading, who warned that central banks haven’t been able to get inflation under control.
“You know, all those calls that things were really, ‘Maybe we would avoid a recession’ and ‘Oh, things aren’t that bad’ and ‘Maybe we’ll get a mild recession’ and ‘The central banks now have… inflation under control’ and blah, blah, blah. Well, guess what’s rearing its ugly head again? That would be more inflation,” Zang said.
New inflation indicators from the US, China and Germany strengthened the belief of financial markets that high interest rates would be in force longer than expected.
In the US, prices for raw materials surged in February, indicating that inflation will remain elevated. Over two weeks prior, the latest consumer price report showed that consumer prices climbed 6.4% in January year-over-year, only 0.1% down from the year-over-year increase recorded in December. Furthermore, consumer prices increased 0.5% from December to January, much higher than the 0.1% rise recorded from November to December.
Despite all of this data proving that inflation is still a persistent threat and the recession is still nearby, Secretary of the Treasury Janet Yellen claims the government has it under control.
In the midst of it all, central bank gold demand continues to skyrocket.