Aaron Brown: The current gold fever has nothing to do with inflation ... nor with gold

The price of gold has recently broken down a record that has been going on for more than four decades after its amendment according to inflation. At current levels, the purchase power of gold recorded its peak, which was recorded at $ 850, or $ 3524 at the present value in January 1980. There are two factors that usually accuse the price of gold; Fear of inflation, fear of financial limitation, as in the case of fines or restrictions on capital. They reached in January 1980, when the consumer price index (in the United States) rose 13.9% year -on -year, and after President Jimmy Carter frozen Iranian assets in the previous November. However, the suspected workers presented evidence of innocence in 2025; Gold prices did not rise from the beginning of the pandemic until the end of October 2022 or landing, but it has since continued to rise. As for the inflation rate, the peak reached 9.1% in June 2022, but it dropped to 7.7%, and it was delayed. The profit threshold for ten-year bonds- in general, is the expectation of financial markets for the average inflation rate during the next decade to the highest levels at 3.04% in April of that year, and dropped to 2.51% by the end of October. In addition, it is a high cost for possession of gold, and it is difficult to give responsibility for raising international stress or US financial arrogance. Russia invaded Ukraine for the second time in early 2022, and the sanctions soon followed. But attention fell by October. The Hamas attack on Israel will only take place a year later. At the time, there were no international, political or financial events. Also read: The price of gold is close to standard levels in anticipation to reduce US interest. Any price is essentially. The cost of owning gold is also large as it is about 0.5% in the golden boxes annually, but in the case of purchasing material, there is storage and insurance costs, and these costs rise in the case of renewal of future gold contracts. At the same time, the investor does not get the real positive return that can be achieved from other assets, and the left way to estimate this loss is to follow the return on the cabinet -protected effects, as it is currently a yield higher than the inflation rate of 1.67%, consequently, which has a gram of gold in the form of a trading box, which is a possible income of 2.17%. When gold owners have demanded to compensate them before asking which investors in gold will benefit from $ 79 annually, to look at the value that is estimated to own a gram of gold over time, amended according to inflation to reflect the current value of the dollar. Although the price of gold in the rise from the beginning of 2018 was to the outbreak of the pandemic, the value of possession of a gram of gold fell to the negative side in June 2020, and investors did not return in April 2022. Gold achieved a higher return than the purchase of a $ 9 -dollar cabinet of inflation. Also read: Gold is more shiny if you are a year before the price of gold on the intersection of data, the state of investors in the precious metal has been changed. After asking for nine dollars annually in exchange for possession of gold, they are ready to pay an amount to reach the highest level at $ 91 to own it. This is due to the high income of the Cabinet protected from inflation is not the increase in gold prices. However, it should be noted that it is an increase in the value of the amount that investors have expressed their willingness to pay for owning a gram of gold, and not an increase in the price of the precious metal. Hedging instruments show the same strange direction that during the pandemic, the Russian invasion and the panic of inflation during the era of Joe Biden administration, investors wanted to obtain for their own ownership of gold, and then returned to prepare to pay for possession of the precious metal when the situation stabilized. We have seen the same style in other hedging instruments of inflation and the risk of financial limitation in the United States, such as the Swiss Frank and ‘Bitcoin’, because it has not been proven that the inflation rate has reached its highest level, and the faded surrounding political conditions have reached its peak, and the international situation to become exceptionally dangerous, and soon the value of the crochet centers has soon increased. Gold attracts attention from stocks. What if gold is just the hand of the right witch that concludes from what her left hand does, the attraction of investments in an important portfolio such as the S&B 500 index? The following graph shows the periodic profits that are periodically on the S&B 500 index returns, with the income of the secure treasury effects of inflation for equity equivalent to the price of a gram of gold. The line was reversed to compare it to the chart that accompanies gold. On top of the chart, investors are ready to pay a large return for owning gold, and they accept only a small thing for the ownership of shares, and at the bottom of the graph, investors demand a major return for the ownership of gold or shares. The two lines appear to be similar, both of which decrease before the corona pandemic, although the rate of decline in equities is faster compared to gold. The shares recovered immediately with the outbreak of the pandemic (investors demanded a larger amount for the ownership of the shares), while there was no significant gold change until mid -2022. Since then, gold has exceeded the shares. If investors are afraid of inflation, the profit should rise, but it moves in a narrow range during 2025, from 2.17%, with 2.47%, to 2.37%at the end of last week. Changes in the real rate of return behind the high price high as the most important driving force of the S&B 500 and gold prices are the changes in the real rate of return, which is what investors demand to own safe assets protected from inflation. And where this rate dropped during 2025, there was no significant change in the value investors expected to own gold, so its price shaved. Also read: The price of gold still records new standard levels with the support of the interest reduction races. On the other hand, investors in the expected average shares reduced the real return with the decline in the income of the protected treasury from inflation, and the “S&B 500” index increased, but only 12%. Due to the lack of anxiety of inflation, the major changes in the actual expected yield, not gold, indicate the fear of stagnation. To understand the markets in the current period, we must follow the protected treasury effects of inflation and shares. Gold Luster can be attractive, but luster can lead the attention of the basic data.