Metals Dominate: Inflation, Recession Beware

Precious metals continue to outpace major stock and bond market indexes this year, providing true diversification benefits for those paying attention. Palladium is doing the best YTD, up 12%, followed by gold.

For the latest week, we have gold down 1% to $1,756, silver off 3.8% to $19.29, platinum down 5.7% to $890, and palladium down 6.8% to $2,056. Platinum and palladium are reacting to concerns about a worldwide economic slowdown.

Gold is off 2.6% for the year, silver is down 19%, platinum is off 12%, and palladium is down 17%.

Continuing inflation includes energy/utility costs rising here in the United States and at record levels across Europe. 2/3 of the United States is experiencing drought conditions, while Europe faces the worst drought in 500 years, and critical agricultural regions across China have been experiencing the worst drought conditions since 1960. As a result, future food costs may be a continuing source of inflation.

New signs of recession include housing supply reaching levels that have accompanied recession every time (6 previous) since 1970

As a reminder, when inflation and recession happen simultaneously, precious metal is a refuge.