Market Briefing: Gold Yardeni Research, Inc. September 30, 2021 Dr. Edward Yardeni 516-972-7683 [email protected] Mali Quintana 480-664-1333 [email protected] Please visit our sites at www.yardeni.com blog.yardeni.com thinking outside the box Table Of Contents TableTable OfOf ContentsContents Gold Price 1 Gold Price: Nominal & Real 2 Gold vs. Dollar 3 Gold & Commodity Prices 4-5 Gold & PPI Inflation 6 Gold & CPI Inflation 7 Gold, Dollar, & Political Cycle 8 Gold Price and US Federal Deficit & Debt 9 Gold Price & Central Banks 10 Relative Gold Price 11-13 Gold Price vs TIPS Yields 14 Gold Price 15-16 September 30, 2021 / Gold Yardeni Research, Inc. www.yardeni.com Gold Price Figure 1. 2200 2200 1800 GOLD SPOT PRICE 9/30 1800 (daily, ratio scale) 1400 1400 1000 1000 600 US Dollars (1742.80) 600 yardeni.com 200 200 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1800 1800 1400 9/30 1400 1000 1000 600 600 Euros (1503.78) yardeni.com 200 200 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3200 3200 2800 2800 2400 9/30 2400 2000 2000 1600 1600 1200 1200 Pounds (2349.90) 800 800 yardeni.com 400 400 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 270 270 230 230 190 12/30 190 150 150 110 110 Yen (NA) 70 70 yardeni.com 30 30 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 200-day moving average Source: Haver Analytics. Page 1 / September 30, 2021 / Gold Yardeni Research, Inc. www.yardeni.com Gold Price: Nominal & Real Figure 2. 2270 2270 2070 GOLD PRICE* 2070 1870 1870 1670 (dollars per ounce, ratio scale) 9/30 1670 1470 1470 1270 1270 1070 1070 870 870 670 670 470 470 270 270 yardeni.com 70 70 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 200-day moving average * Cash price. Source: Haver Analytics. Figure 3. 2000 2000 GOLD PRICE*: NOMINAL vs. REAL 1800 Sep 1800 1600 1600 1400 1400 1200 1200 1000 Gold Price/CPI 1000 Gold Price 800 800 Aug 600 600 400 400 200 200 yardeni.com 0 0 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 CPI = 100 on 1982-84. * Cash price. London gold bullion, PM Fix. Source: US Department of Labor, Bureau of Labor Statistics and Haver Analytics. Page 2 / September 30, 2021 / Gold Yardeni Research, Inc. www.yardeni.com Gold vs. Dollar Figure 4. 2600 2600 GOLD SPOT PRICE: FOREIGN EXCHANGE VALUE* 2400 (trade-weighted dollars per ounce, weekly) 2400 2200 2200 9/30 2000 2000 1800 1800 1600 1600 1400 1400 1200 1200 1000 1000 800 800 600 600 400 400 yardeni.com 200 200 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 * Using JP Morgan trade-weighted dollar. Source: Haver Analytics and JP Morgan. Figure 5. 2200 140 2100 GOLD PRICE & THE DOLLAR Gold Price* 2000 (weekly) (dollars per ounce) 1900 130 1800 JP Morgan Nominal 9/30 1700 Broad Effective 1600 Exchange Rate** (2010=100) 9/30 1500 120 1400 1300 1200 110 1100 1000 900 800 100 700 600 500 90 400 300 200 yardeni.com 100 80 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 * Cash price London gold bullion, PM Fix. ** Argentina, Australia, Brazil, Bulgaria, Canada, Chile, China, Colombia, Croatia, Czech Republic, Denmark, Ecuador, Egypt, France, Germany, Hong Kong, Hungary, Japan, India, Indonesia, Israel, Italy, Korea, Kuwait, Malaysia, Mexico, Morocco, New Zealand, Nigeria, Norway, Pakistan, Panama, Peru, Philippines, Poland, Romania, Russia Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, Ukraine, Uruguay, Venezuela, Vietnam, and United States. Source: Haver Analytics and JP Morgan. Page 3 / September 30, 2021 / Gold Yardeni Research, Inc. www.yardeni.com Gold & Commodity Prices Figure 6. 2200 660 2100 GOLD SPOT PRICE & INDUSTRIALS COMMODITY PRICE INDEX 9/29 2000 (daily) 620 1900 580 1800 9/30 1700 Gold Price 540 1600 (dollars per ounce) 1500 500 1400 CRB Raw Industrials 460 1300 Spot Price Index* (1967=100) 1200 420 1100 1000 380 900 340 800 700 300 600 500 260 400 220 300 200 180 100 yardeni.com 0 140 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 * Includes copper scrap, lead scrap, steel scrap, tin, zinc, burlap, cotton, print cloth, wool tops, hides, rosin, rubber, and tallow. Source: Haver Analytics and Commodity Research Bureau. Figure 7. 2175 2175 GOLD SPOT PRICE & INDUSTRIALS METALS PRICE INDEX 2025 (daily) 2025 1875 1875 1725 Gold Price 9/30 1725 (dollars per ounce) 1575 1575 CRB Industrial Metals 1425 Spot Price Index* 1425 (1967=100) 1275 1275 9/29 1125 1125 975 975 825 825 675 675 525 525 375 375 225 225 yardeni.com 75 75 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 * Includes copper scrap, lead scrap, steel scrap, tin, and zinc. Source: Haver Analytics and Commodity Research Bureau. Page 4 / September 30, 2021 / Gold Yardeni Research, Inc. www.yardeni.com Gold & Commodity Prices Figure 8. 2200 155 GOLD PRICE & BRENT CRUDE OIL PRICES (weekly) 145 2000 135 1800 9/30 125 1600 115 105 1400 95 1200 85 9/29 75 1000 65 800 Gold Price* 55 (dollars per ounce) 600 45 Brent Crude Oil Price** 35 400 (dollars per barrel) 25 yardeni.com 200 15 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 * Cash price. London gold bullion, PM Fix. ** Nearby futures price Source: Haver Analytics and Commodity Research Bureau. Figure 9. 2200 640 2100 GOLD & CRB FUTURES PRICES 620 (weekly) 2000 600 580 1900 Gold Price* 560 1800 (dollars per ounce) 9/29 9/30 540 1700 520 1600 CRB Spot Commodity Price Index: 500 1500 All Commodities 480 1400 (1967=100) 460 1300 440 1200 420 400 1100 380 1000 360 900 340 800 320 700 300 600 280 500 260 240 400 220 300 200 200 180 100 160 yardeni.com 0 140 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 * Cash price. London gold bullion, PM Fix. Source: Haver Analytics and Commodity Research Bureau. Page 5 / September 30, 2021 / Gold Yardeni Research, Inc. www.yardeni.com Gold & PPI Inflation Figure 10. 2000 20 GOLD PRICE & PPI 1900 18 1800 Sep 1700 16 1600 1500 14 1400 1300 12 1200 Gold Price* 10 1100 (dollars per ounce) 1000 8 900 Producer Price Index (yearly percent change) 800 6 700 Aug 600 4 500 2 400 300 0 200 yardeni.com 100 -2 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 * Cash price. London gold bullion, PM Fix. Source: Haver Analytics and US Department of Labor, Bureau of Labor Statistics. Figure 11. 2000 18 GOLD PRICE & PPI 1900 16 1800 Sep 1700 1600 14 1500 Gold Price* 12 1400 (dollars per ounce) 1300 10 1200 Producer Price Index 1100 Ex Food & Energy (yearly percent change) 8 1000 900 6 800 Aug 700 4 600 500 2 400 300 0 200 yardeni.com 100 -2 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 * Cash price. London gold bullion, PM Fix. Source: Haver Analytics and US Department of Labor, Bureau of Labor Statistics. Page 6 / September 30, 2021 / Gold Yardeni Research, Inc. www.yardeni.com Gold & CPI Inflation Figure 12. 2000 18 GOLD PRICE & CPI INFLATION 1900 16 1800 Sep 1700 Gold Price* (dollars per ounce) (1775.78) 14 1600 1500 12 1400 Consumer Price Index (yearly percent change) (5.20) 1300 10 1200 1100 8 1000 900 6 Aug 800 700 4 600 2 500 400 0 300 200 -2 100 yardeni.com 0 -4 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 * Cash price. London gold bullion, PM Fix. Source: Haver Analytics and US Department of Labor, Bureau of Labor Statistics. Figure 13. 2000 18 GOLD PRICE & CPI 1900 1800 Sep 16 1700 Gold Price* (dollars per ounce) 1600 14 1500 1400 Consumer Price Index Ex Food & Energy 12 1300 (yearly percent change) 1200 yardeni.com 1100 10 1000 900 8 800 700 6 600 500 Aug 4 400 300 200 2 100 0 0 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 * Cash price.