Inflation and Gold Face Reversion vs. US Stocks Gold will eventually return to its 60-month moving average and the consumer price index toward 0%, if history is a guide. It's usually a matter of time for normal reversion, and my graphic features a top potential catalyst: a minor backup in the US stock market. The CPI at 4.2% as of June 12 may have peaked, according to Bloomberg Economics, with similar inklings for gold. In 1Q, the metal stretched to about a four-decade high vs. its 60-month mean and a basket of US Treasuries. Inflation running roughly double the Federal Reserve's target, alongside stock-market cap-to-GDP near a 100-year high, might suggest a connection. The CPI has bottomed at or below 0% three times since 2009. A 20% drawdown in the S&P 500 would be about 50% of GDP -- ample pressure for disinflation. Affordability is a top election issue. Full report on the Bloomberg here: https://blinks.bloomberg.com/news/stories/tggmhcr24udd {BI COMD} #gold #stockmarket #bonds @Bloomberg(Mike McGlone)