gold bar on US$100 bill

"We know we have inflation," said Will Rhind of GraniteShares. Now the market needs to acknowledge that it's happening.

Will Rhind: Inflation is Here, Gold Needs Market to React youtu.be

After reaching an all-time high in 2020, the gold price has left some investors disappointed this year.

Even with numerous factors working in its favor, the yellow metal has remained fairly rangebound in 2021, trading between about US$1,750 and US$1,900 per ounce.

Speaking to the Investing News Network, Will Rhind, CEO of GraniteShares, shared his thoughts on why gold has failed to maintain last year's momentum, and what could be next in 2022.


Rhind noted that gold's 2020 performance was driven largely by fear as buyers flocked to the precious metal as a crisis hedge. When the situation began to settle and the world started going back to normal, gold became less appealing. "I think what's really behind this is we're looking for that next catalyst," he explained.

In his opinion, that catalyst relates to inflation. "I think what we're looking for now is signs of an inflation problem. Not just inflation — we know we have inflation — but signs that the market now acknowledges that there's a problem with inflation," he said. He has pointed out multiple times this year how inflation is weighing on gold.

Aside from inflation, Rhind identified the US dollar as an important element to watch when it come to gold. "The dollar is always a big factor whenever we talk about gold," he said. "The dollar has been in a pretty bullish stance of late, but if we see some weakening or flattening in the softening of the dollar that will be positive for gold."

Finally, he shared his updated thoughts on whether a new commodities supercycle is in the works. Some market watchers have been hesitant to make that call, but Rhind has a number of reasons he thinks it's happening.

"I think we're now at the 'perfect storm' moment where prices for nearly all commodities are lifting off. And that is largely due to COVID and reopening supply chains — all of these things," he said. "But I think that there's also a second phase to this, which is longer term, which is about this transition to carbon-free energy infrastructure, or certainly a reduced carbon-intensive energy structure."

Watch the interview above for more from Rhind on gold and the commodities space.

Don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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MARKETS

Markets
TSX21210.20+84.30
TSXV955.75+11.70
DOW35227.08+327.74
S&P 5004667.44+72.82
NASD15808.65+316.99
ASX7279.30-128.00

COMMODITIES

Commodities
Gold1784.91-10.34
Silver22.87-0.44
Copper4.34+0.05
Palladium1799.00+14.50
Platinum958.45-21.55
Oil70.97+2.82
Heating Oil2.18+0.09
Natural Gas4.87-0.61