Capital Commerce

Inflation Numbers Give Ammo to Gold Watchers

By James Pethokoukis

Posted: December 14, 2007

Today's terrible inflation numbers—headline consumer prices jumped 0.8 percent in November, while the core rate (excluding food and energy) rose 0.3 percent—is sure to give comfort to those analysts who have been watching the price of gold and concluding that its ascent means higher prices are on the way. Other economists, though, think market-based measures such the difference between 10-year government bond yields and yields on inflation-indexed bonds are a better gauge of expectations. For a fair analysis of both positions, I urge you to check out this article written by my guy John Tamny, editor of RealClearMarkets, a sister site to RealClearPolitics. Although Tamny is a gold guy, he gives a good overview of the issue.

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