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Thursday, September 28, 2023

Top Stories This Week: Gold Flies on CPI Data, is the Market Waking Up to Inflation?

It’s been a big week for gold, which started the period around US$1,810 to US$1,820 per ounce, but rose to nearly US$1,870 midweek. The price remained elevated on Friday (November 12) afternoon.

What’s behind gold’s big move? Many market watchers are pointing squarely at the latest US inflation data.

News hit this week that the country’s Consumer Price Index rose 6.2 percent year-on-year in October, marking the fastest 12 month pace since 1990. It was also the fifth month in a row that inflation was above 5 percent.

If you’ve been following our YouTube channel this year, you’ll know that many of the people I’ve been speaking with have been sounding the alarm about inflation throughout 2021 — there’s a strong consensus that it’s a real problem, not a transitory issue as the US Federal Reserve was (at least initially) suggesting.

Will Rhind of GraniteShares is one person who’s shared his views on inflation over the course of the year, and in a conversation just before gold’s price increase this week, he explained why the precious metal has been slow to react to news about inflation. Put simply, he believes the market as a whole needs to realize inflation is a problem.

“I think what we’re looking for now is signs of an inflation problem. Not just inflation — we know we have inflation — but signs that the market now acknowledges that there’s a problem with inflation” — Will Rhind, GraniteShares

So does gold’s price jump this week mean the broader market is finally waking up to the threat of inflation? When we polled our Twitter followers the “yes” side won by a wide margin, taking over 80 percent of the vote.

We’ll be asking another question on Twitter next week, so make sure to follow us @INN_Resource or follow me @Charlotte_McL to share your thoughts.

We’re going to close out with the psychedelics space, where the industry’s first major business conference just ended. Held in Miami, Florida, by Microdose, the Wonderland event brought together a variety of industry experts.

Psychedelic drugs have a long history, but it was only last year that the market really started to attract interest from an investment perspective. Since then, companies in the arena have emphasized that they want to take a life science-based approach to their work, using clinical trials to unlock the medical benefits of the drugs they are pursuing. At the same time, there’s a reluctance to allow the industry to get too corporate.

Charlie Finnie of Ambria Capital spoke about that divide at the Wonderland conference, saying that while it’s popular to want to get rid of big pharma, it’s not realistic. In his view, psychedelics players need to work with these large companies and take advantage of the benefits they can provide — such as huge amounts of capital.

“It’s very politically popular to say, you know, ‘Get rid of big pharma.’ I think that’s totally unrealistic and a pipe dream and what you have to do is … understand the good things they can bring to the party, which is a ton of capital” — Charlie Finnie, Ambria Capital

Want more YouTube content? Check out our YouTube playlist At Home With INN, which features interviews with experts in the resource space. If there’s someone you’d like to see us interview, please send an email to cmcleod@investingnews.com.

And don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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