Metals Minute 183: Gold & the Chili Index
Gold is up 10% YTD, with silver following up at 5%. For the week, gold is 3% higher at $2,031, silver is up 7% to $25.22, platinum is up 3% at $1,017, and palladium is down 1% to $1,467.
From a year ago today, gold is up 6%, silver and platinum are up 4%, and palladium is down 35%.
I’ve created an anecdotal index called “The Chili Index” which compares the cost of ingredients to make a batch of chili across periods of time. The 2021 cost was $18-$22 for the required items. The last couple of batches made this year (2023), ranged from $36-$38 for the same items. The “inflation” part of “stagflation” continues to be firmly entrenched, and the “recession” portion is beginning to manifest, with some economists believing the recession started late last year. Stagflation traditionally is a good environment for gold.
Central banks have continued to purchase gold at a strong pace in 2023, the most aggressive start to the year since 2010. Some nations are selling and repurchasing gold to claim the gains without losing the gold.
Analysts at VanEck believe we are entering a multi-year bull market for gold, as we have discussed in this forum.
