Attention, gold enthusiasts…
Goldman Sachs is reaffirming its optimistic stance on gold prices, raising its forecast for early 2025 to $2,900 per troy ounce. This marks their second significant adjustment this year.
What’s fueling this bullish sentiment? A combination of factors: rapid declines in interest rates in the West and China, a surge in gold purchases by emerging market central banks, and traditional risk hedging strategies.
It appears that the long-anticipated bull market for precious metals is gaining momentum!
Billion-Dollar Standoff: Historic US Ports Strike Poses Economic Threat
The United States is on the brink of an economic crisis as dockworkers at key ports along the East and Gulf coasts have gone on strike, halting container and auto shipments. This work stoppage impacts 36 ports that handle nearly half of the nation’s trade volume, potentially costing the economy billions each day.
With the presidential election approaching, the stakes are high, and the length of the strike will significantly influence its economic repercussions. Experts have warned of considerable losses and extended shipping delays, creating a bleak outlook for both businesses and consumers.
Last-Minute Dockworker Agreement Prevents Major Global Crisis
In a surprising turn of events, a potential disaster has been averted. The International Longshoremen’s Association and the U.S. Maritime Alliance have reached a tentative wage agreement, effectively halting the port strike that involved tens of thousands of dockworkers.
This vital agreement includes a substantial wage increase for workers and extends the current contract until January 15, 2025, allowing for further negotiations on unresolved issues.
The agreement successfully concluded a tense three-day standoff that threatened to disrupt supply chains and significantly impact the U.S. economy. For now, it seems that global trade can continue without major interruptions.
Assessing Inflation Through Everyday Items
Last week, we explored an intriguing perspective on inflation and purchasing power using an unconventional metric: the iPhone/Gold ratio. Incrementum, a prominent gold research firm, revealed that the latest iPhone 16 Pro can be acquired for just 0.60 ounces of gold—a 23% decrease from the iPhone 15 Pro, which required about 0.78 ounces.
Continuing their innovative economic analysis, Incrementum has shifted focus to another popular consumer item: beer at Oktoberfest. Their latest report investigates the beer-to-gold ratio at the renowned Munich festival.
Oktoberfest
For the 2024 Oktoberfest, beer prices are projected to range from €13.60 to €15.30 per liter, reflecting a 3.87% increase from 2023. Some larger tents will exceed the €15 mark for the first time.
While this may seem high to some, it is actually below the historical average inflation rate of 4.0% since 1950 and significantly less than last year’s nearly 8% increase.
Gold’s Steady Purchasing Power
Remarkably, similar to the iPhone, the beer/gold ratio indicates a decrease in beer prices when measured in gold. This consistent trend across various consumer goods highlights gold’s effectiveness as a hedge against inflation.
While cash in your savings account may be losing purchasing power, gold remains resilient. Although you may not be able to buy your next iPhone or Oktoberfest beer with gold coins, these examples clearly illustrate that saving in gold could help you keep pace with rising prices more effectively than relying solely on the dollar.
So, as you contemplate your long-term savings strategy, consider incorporating tangible assets like gold or silver into your portfolio.
In a world of ever-increasing prices, safeguarding your purchasing power is truly invaluable.
Best regards,
