Gold’s short-term setback hides a powerful long-term setup

By Neils Christensen – Kitco

Investors are once again getting a little frustrated with gold as the precious metal ends another week on the defensive. After its recent rally, prices are now caught in a familiar short-term tug-of-war, testing support near $5,000 an ounce as markets grapple with the implications of slowing growth and persistent inflation.

The latest economic data has only complicated the outlook. U.S. GDP growth slowed sharply in the fourth quarter, expanding just 0.7%, while inflation pressures remain stubborn. This combination has revived concerns about stagflation—a toxic mix of weak growth and rising prices that policymakers have limited tools to address.