Gold is signaling that the next inflationary storm is about to arrive.
In the last year, gold has done several remarkable things.
First and foremost, central banks have acquired so much gold that the precious metal now comprises a greater percentage of foreign reserves than Treasuries for the first time in 30 years. What does it tell you that the entities that can literally print money at will are loading up on an inflation hedge?
Remember, we’re talking about global central banks, not just one single bank. And it’s not difficult to see why they’re loading up on gold. In the last two years, the precious metal has broken out against every major world currency.
The markets are SCREAMING that currency devaluation is underway. And again, this is as global phenomenon: gold has broken out against the U.S. dollar, Euro, Yen and even the Swiss Franc!
Which brings us to today…
After a surge like the one gold experienced in form the end of 2024 through the first quarter of 2025, it makes perfect sense for the precious metal to “take a breather.” In investing, nothing goes straight up or straight down. And gold has spent the last four months consolidating.
Not anymore.
Last week gold broke out of its four-month consolidation period to the upside. This is a major “tell” that suggests the next leg up is beginning right here and now.
Put simply, gold is telling us that the next inflationary storm is about to begin. Central banks are already firing up the printing presses and cutting interest rates: both the European Central Bank and the Bank of Canada have cut rates SEVEN times, the Bank of England has cut rates five times, and the Swiss National Bank has already cut rates to zero!
The time to prepare for what’s coming is NOW before it arrives.