Gold Prices Are Not Responding To Inflation

The fundamentals for gold appear to be getting better with inflation numbers getting worse in japan, people talking about inflation being too low in Europe and that they need to create more inflation, more of the inflation numbers picking up here.

All of these drum beats get louder and louder for inflation, yet the price of gold is not responding. Maybe they are still talking about, "Well, I guess inflation is good, I suppose there is no real reason to buy gold." Maybe there`s a lot of confidence out there that the central bankers can can keep inflation contained. They were not able to contain the problems in the mortgage market but maybe investors have a little bit more confidence that they can contain inflation.

And when they are talking about that they want higher inflation they are just going to tweak it up a notch. They are going to move it from 1.50% to 1.80% or 2.00% or whatever. In the Eurozone its still around 1.00% officially, so maybe they think they have a little bit more room to crank it up a little bit there and that somehow none of this is going to be bullish for the price of gold.

Related ETFs: SPDR Gold Trust ETF (GLD), Market Vectors Gold Miners ETF (GDX)

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.