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Inflation is not a concern; these trading signs are much more important - Bill Baruch

Kitco News

Spikes in commodity prices, as well as used cars and trucks, are likely to remain transitory said Bill Baruch, adding that the Federal Reserve was right about inflation projections.

“Inflation really is not a concern for me. Here’s the thing, where inflation matters right now, we already see it. Look at lumber prices, and look at chip shortages. It’s supply chain related,” Baruch told David Lin, anchor for Kitco News. “When it comes to the Fed’s metrics, we’re not really seeing the inflation, and that gives them better reason to stay patient.”

In fact, Baruch said that he wouldn’t be surprised to see a deflationary environment a few months from now.

“What’s important though, is to look at the Chinese Yuan, and the Chinese Yuan is actually against the dollar, breaking out above the 2013 trendline,” he said. “You’ve heard people say [Chinese officials] really talk down the excessive trading in the metals, excessive prices, frothiness in the metals, and they’re talking that down because they want to see prices lower so they can buy those prices, they can buy better at the more valuable Yuan.”

Baruch said that energy will continue to rise and expects crude oil to hit $80 a barrel.

Gold and stocks will also continue their upwards trajectory, with the metal set to hit $1,940 an ounce, and the S&P 500 targeting 4,600 points, Baruch said.

For more information on Baruch’s trades, watch the video above.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.