The stronger dollar is wreaking havoc with markets this morning, including the precious metals markets. With approximately 45% of corporate earnings (stocks in the S&P 500 Index) tied to overseas operations, a stronger dollar means lower earnings from overseas due to lower sales.

I believe this phenomenon might be short-lived, lasting for only a few months. If inflation can be pushed negative this quarter, it will impact the COLA payments due for 2023. COLA is the cost of living adjustment added to social security and other benefit payments and is set each year by comparing inflation rates in the 3rd quarter from year to year. We may temporarily see temporary damage to the economy to limit inflation through September.

Meanwhile, looking back 47 years indicates we are entering a historically strong period for the performance of gold. While 3rd quarter performance might be muted this year due to the war mentioned above on inflation, gold doing half, as well as average, would still be 15%; not bad for a quarter.

I believe the intermediate and longer-term prospects for precious metals continue to shine.