After two strong months of rising prices, we are starting to see sentiment shift in the precious metal market.
Stripping out volatile food and energy prices, consumer inflation pressures rose 3.8% for the year, the strongest rise since 1992.
Briton Hill, president and partner at Weber Global Management, put the growing inflation threat into perspective in an interview with Anna Golubova.
There is also the growing expectation that because of the looming inflation threat, the Federal Reserve will have to tighten its monetary policy and reduce its bond-purchase program sooner than expected.
We are already starting to see banks lose some of their conviction that gold prices will make new highs by the end of the year.
“We expect flows to be positive in 2021 on the reflation trade, but rising rates mean that there are conflicting forces affecting the gold price.
She added that while she expects inflation pressures to prove to be transient, there is a tactical case to hold gold for the next six to 12 months.