Foreign media global economic analyst Rana Foroohar said that no matter what happens in the next few quarters, she always believes that the US will enter a more continuous phase of rising inflation. Other than the miracle of productivity brought about by technological upgrades, it is currently hard to imagine the US being able to escape inflation.

Furthermore, the US economy is also heating up. From US fiscal stimulus, to supply chain redundancy in various countries, to all capital investment needed for clean energy transition and reindustrialization in rich countries, even the aging American baby boomers may become an inflationary force because they are healthy, rich, and idle, and can spend.

Gold has always been a hedge against inflation, and when investors are concerned about the stability of the current situation, they also turn to gold. According to Rana Foroohar, gold was sluggish for decades and then exploded when the world was at an important turning point, just like now.

This shift has many analysts predicting a sharp rise in the price of gold. Philippe Gijsels, chief strategist at Fortis Bank in Paris, and his colleague Koen De Leus, author of “Five Trends in the New World Economy,” expect the price of gold to rise from the current $2,374 to $4,000 per ounce in the “near future.” As Gijsels said, “It's not just about interest rates. People are hedging against a new world.”

As a recent report by the Currency Research Associates (Currency Research Associates) notes, “The purchase of gold and the sale of US Treasury bonds by major economies is reminiscent of how the ECB began exchanging dollars for gold in the late 1960s when the Bretton Woods system began to collapse.”

Rana Foroohar said that at this stage, it is possible to benchmark the beginning of gold's continuous rise from 1968 to 1982. In other ways, that period also coincides with the present stage. In 1971, when then-US President Nixon withdrew the US from the gold standard, he imposed a 10% tariff on imported goods. This is an unofficial depreciation of the dollar to protect American-made goods from exchange rate fluctuations.

Former President Trump proposed a 10% tariff on all imported goods if he wins a second term as president. The Biden administration is equally concerned about American industry and workers. No matter who enters the White House, if the dollar depreciates to a certain extent, gold will tend to rise.

Rana Foroohar pointed out that one important reason to look bullish on gold is that America's debt and deficit situation is rapidly becoming unsustainable. According to the latest forecast from the US Congressional Budget Office, the ratio of US debt to GDP will reach 99% by the end of this year, and 172% by 2054. If this were to happen, it would lead to a period of extreme chaos in US monetary policy and markets. This is bad for the world's financial system, but it's good for gold.

Gold bully Luke Gromen, editor-in-chief of “Seeing the Forest Through Trees,” suggested that since the only viable part of the US budget is interest payments (because cuts in welfare spending and defense spending are politically difficult to achieve), the Federal Reserve will eventually have to adjust its policy direction and lower interest rates to help the US avoid falling into a vicious cycle of debt. Further relaxation of monetary policy will undoubtedly have a positive impact on gold.