Despite diverse factors that should be working in its favor, gold has been relatively stagnant in 2021, and so far in the month of August it has dropped fairly precipitously.
Speaking to the Investing News Network, Will Rhind of GraniteShares said in his view the yellow metal won’t get moving until the market shakes off the US Federal Reserve’s current narrative on inflation.
“(Inflation is) probably the main question when it comes to gold at the moment,” he said. “The market … isn’t that worried about inflation, and that’s why you’re getting stock prices at all-time highs, and that’s why the gold price and other inflation hedges are not exploding to the upside.”
Rhind added, “And so really the rationale for that is that the market is accepting the Federal Reserve’s narrative at the moment of the inflation being transitory.”
When asked when the market may recognize that inflation is really an issue, he suggested that the tides may start to change after the summer ends. Rhind noted that assuming it gets harder for the Fed to defend its rhetoric, there may be an awakening between September and the end of the year.
Rhind also spoke about platinum, a metal he believes has major future potential. While it is currently used mainly in catalytic converters, it has a growing future in the production of green hydrogen.
Green hydrogen is produced entirely from renewable sources, a process that involves platinum.
According to Rhind, currently only about 1 percent of hydrogen meets this standard, but that should increase in the future. “What is important here is the amount of infrastructure (and the) coordination of spending and commitment to production of green hydrogen, which we’ve not seen (previously),” he said, noting that both national governments and corporations are putting money toward developing infrastructure for producing green hydrogen at scale.
“I think platinum could be seen alongside the lithiums, the cobalts, etc. as really a technology-based metal of the future,” said Rhind. “And so from that perspective I think in the long run platinum prices could increase significantly from here.”
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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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