Surging Inflation Across the Globe is a Real Test for Gold Price

Here’s a look at the latest developments in the precious metals market for the week beginning 1/10/2022.

Surging Inflation Across the Globe is a Real Test for Gold Price
Lab-Grown Diamonds Vs Mined Diamonds – Everything You Need to Know
Personal Finance: What Betty White and other celebrities did right

Inflation is one of the biggest risks that could derail economic recovery this year, especially if central banks get the tightening wrong, according to analysts.

Surging price pressures are being felt all across the globe. In the U.S., inflation ran at the hottest pace since 1982 in December, rising 7% over the past 12 months.

However, there are signs that global inflation might be close to peaking. For example, in China, price pressures moderated in December, opening the door for the central bank to continue to provide stimulus. The consumer price index was up 1.5% in December versus 2.3% in November. China’s producer price index also cooled, rising 10.3% annually, down from November’s 12.9%.

In the U.S. producer price index also decelerated, pointing to a cooling in inflation.

The latest comments from Federal Reserve Chair Jerome Powell indicated that the central bank is willing to do anything to control inflation.

With inflation running so hot across the globe and central banks starting to take the threat of rising price pressures seriously, gold will meet its real test this year. Last year, gold declined largely due to a lack of investor interest. In 2022, all eyes will be on how the yellow metal performs as an inflation hedge asset.

“The precious metal continues to draw strength from a weaker dollar and slight pullback in Treasury yields with prices trading around $1826 as of writing. Inflation risks could also be supporting upside gains for gold which has often been considered a hedge against rising prices. With inflation in the United States jumping in December, this could encourage some investors to hold onto their gold investments,” Otunuga said

From a technical perspective, gold can move towards $1,845 if it closes above $1,831 an ounce. On the other hand, if it drops below $1,810, it can move towards to $1,800 and $1,770 an ounce, he added.

To learn more: Surging Inflation Across the Globe is a Real Test for Gold Price

Everything You Need to Know about Lab-Grown vs Mined Diamonds

Lab-grown diamonds – created in factories using one of two methods, each of which requires extreme heat or extreme pressure – are marketed with words such as ethical, sustainable and carbon-neutral. Mined stones, meanwhile, have moved on from De Beers’s 1948 tagline, “A diamond is forever”, to promote positive social impact and natural provenance.

“The remarkable rise of lab-grown diamonds is putting pressure on the mined-diamond industry,” says Villegas. “What I would like to see is a ‘race to the top’ among producers on social and environmental sustainability efforts. Now that would make for a truly beautiful sector.” Put simply, the diamond industry needn’t be about either zero carbon emissions (lab-grown) or livelihoods (natural) – it can be about both. Let the games begin.

Lab-Grown vs Natural – what you really need to know:

Lab-grown diamond pros:

Cheaper by 30 per cent (for now)
Can be grown using 100 per cent renewable energy
Are chemically identical to natural diamonds

Lab-grown diamond cons:

Investment value yet to be proven (some experts predict they will have little to no resale value as the sector grows and supply outstrips demand)
They are a product of technology, not nature, which for some people lacks emotional punch
They don’t currently have inherent positive social impact nor do they support millions of livelihoods
There is a lack of transparency in how much energy they use

Natural diamond pros:

Gem quality diamonds are a finite resource, so their rarity is inherent
They are ancient, formed within the earth billions of years ago
They support tens of millions of people around the world
They are a valuable natural resource that can support the economies of entire countries
They have some resale value, and in some cases, investment value

Natural diamond cons:

Mining is carbon intensive, often relying on diesel-run machinery
Diamond mining uses large amounts of water, energy, and earth
A small percentage of diamonds mined in unregulated conditions are still making it into the general supply chain

General tip:

Whether it’s lab grown or mined, ask for more information. Where was it grown, or mined? What sort of energy was used? Is the company behind the stone acting responsibly?

To learn more: Lab-Grown Diamonds Vs Mined Diamonds – Everything You Need to Know

Personal finance: What Betty White and other celebrities did right

Celebrations this New Year were overshadowed by the death of beloved actress Betty White at age 99. Social media was flooded with images of White being greeted at the gates of heaven by the other “Golden Girls” and cast members of the “Mary Tyler Moore Show,” and the many dogs she rescued.

Ideally, many of us aspire to stay active and healthy as long as possible, live comfortably into our 90s or even 100s, and then die from natural causes while surrounded by loved ones. Unfortunately, for the famous and us not-so-famous, this isn’t often the case.

Many celebrities are great role models of how to live well into old age. James Earl Jones and Rita Moreno recently became nonagenarians. They join celebrities Mel Brooks, Harry Belafonte and Angela Lansbury, all in their mid-nineties.

What can we learn from active, senior celebrities, especially regarding their finances?

Hire financial professionals

A story last week about White reminded me that many of our clients who were “household names” had long, close relationships with their management team. In interviews, White’s agent claimed he played gin rummy with her during the last few weeks of her life. You could tell she had people she trusted who cared about her and took care of her. I think as we get older, we all need that as well.

Work past retirement age

Stay married (if you can)

Buy a comfortable home

Put some of what you make aside

Support charities you care about

Stay positive

Be grateful

Do you agree with these tips?

To learn more: Personal finance: What Betty White and other celebrities did right