Gold’s Lackluster Year May Get a Boost as Stagflation Risks Grow
- Energy crunch is raising costs, risking recovery from pandemic
- Central banks have said rising consumer prices are transitory
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Gold’s traditional role as a hedge against inflation has faltered all year, but growing risks that the global recovery could stall as price pressures rise may signal a turnaround for the precious metal.
Inflation had already been increasing on the back of unprecedented pandemic-era stimulus and as the rollout of vaccines spurred the gradual reopening of some countries. The surge in energy prices that’s accelerated over the past month on fears of shortages, on top of a broader rally in commodities, is now stoking concerns about sustained cost pressures.