All that glitters is not ...
... gold? The yellow metal has extended the blistering rally it saw in 2024 into this year and now is within a whisper of $3,000 an ounce. The ages-old perception that bullion has inherent value in uncertain times has made it the safe haven of choice for investors looking to hedge risk in a world now being shaken up by the Donald Trump presidency.
After rising some 30% last year, gold prices are up a further 12% so far in 2025 amid concerns that Trump's long-threatened tariffs will spark a trade war. That could in turn fuel a resurgence of the inflation that cheapens the value of money - and so increases the lure of the precious metal.
But hang on – weren't central bankers telling us only a couple of months ago that inflation was pretty much beaten? Well, it seems the self-styled "tariff man" has shifted the narrative.
Minutes of the last U.S. Federal Reserve meeting released this week show that policymakers raised concerns about higher price pressures, with companies reporting that they expected to raise prices so as to pass on the cost of any import tariffs.
At the same time, one in five Americans said they are purchasing more items than usual primarily due to their concerns over tariffs, a CreditCards.com report showed.
Nor is it just the United States where inflation fears are rising.
Even in Japan, which until recently has been more used to staving off deflation, there are concerns among some that interest rates need to go up to counter the effect of rising inflation expectations, and the determination of companies to pass on their higher labour costs to the end-consumer.
European Central Bank policymaker Boris Vujcic meanwhile has raised the spectre of "stagflation" – the worst-case scenario of rising inflation and a stagnant economy in the euro zone - although it's fair to say that others such as ECB President Christine Lagarde play down that outcome.
All this may well suggest the gold rally has some legs to run further. For some, however, the glittering prize is not precious metal but critical minerals – the subject of this week's episode of the Reuters Econ World podcast.
U.S. negotiations to end the war in Ukraine have drawn the spotlight onto the country's supply of the critical minerals that power so many of the gadgets that drive the modern economy. From the nether regions of the Periodic Table to open cast mines in central Ukraine and the Democratic Republic of Congo, our guest host Christopher Walljasper and reporter Ernest Scheyder dig into the lucrative economics – and fraught geopolitics - of the sector. Listen here.
Two big set-pieces next week will feed into the economic agenda: the German election and the meeting of G20 finance ministers in Cape Town, South Africa.
Some are hoping that the election in Europe's largest economy will produce a new government in Berlin more amenable to removing the strict limit on spending put in place after the global financial crisis – the self-imposed "debt brake". This might be true. But the bigger question may be how long it takes to form a new ruling coalition of any shape – some Berlin observers suggest this could be anything from two to six months. That is a recipe for policy stasis.
Speaking of which, the main suspense around next week's G20 meeting is whether it can move the dial on global economic policy at all. The decision by U.S. Treasury Secretary Scott Bessent to skip the meeting altogether is looking a lot like the latest blow to the group's relevance.
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