Yesterday, US statistics reported annual inflation of 3.7% - 0.1% higher than expected. The markets reacted like a dying woman, due to the fear of a possible interest rate hike. Practically everything collapsed - from technology companies to the prices of precious metals and related businesses. Only oil prices and companies in the oil and gas industry remained slightly affected.
Today the situation is particularly interesting. Gold is jumping back to the levels before the news as if nothing had happened. The reaction of the gold price was similar to the announcement of the interest rate hike in September - it fell, but then quickly returned to the previous level.
Nobody knows what will happen tomorrow. Personally, I think that no one can afford a significant increase in interest rates - neither the USA, nor China, nor any other major country. They are simply all mired in such piles of debt that higher interest rates would make them absolutely unpayable. This is the big difference between the 1970s and 1980s and today.
Unfortunately, most governments around the world have only one possible option for paying off their debts - printing paper and high inflation. They have used it many times in history.
Gold knows history very well and refuses to fall. Central banks of more and more countries are buying again as if on Black Friday - China's, for example, reported record purchases in September.
The movement of silver is remarkable, which collapsed from $60 to $55 per ounce last night and today is not bouncing up as strongly as gold. The current ratio of gold to silver prices is 75:1. This means that the potential for silver to catch up if the price trend resumes is huge.
The above reflects only my personal opinion and does not constitute an investment recommendation.