Which Is More Likely To Happen First--- Inflation UP, or Gold DOWN?

Just bought a new car for my daughter this week. Nothing real fancy, an entry level 2025 Subaru. The 2026 models will be out in a few more weeks and most will see substantial increases in price with fewer choices at the entry level. The Impreza for instance will go from 3 trim levels to only 2, with the current base level eliminated. The next higher trim level (Sport) will be $2,200 more than the 2025 base trim level, with virtually nothing extra aside from slightly larger alloy wheels.

At any rate, the $27,500 all-in cost including transportation, documentation, sales tax and all the other mickey mouse fees came to only 7-1/2 ounces of gold. I'm fairly certain that in the 140 year history of the automobile, that's the cheapest it has ever been in gold. By way of contrast, back in 1999 when Gordon Brown was Chancellor of the Exchequer and liquidating all of England's gold holdings, a similar priced car in US dollars would have required 100 ounces more for a total of 107-1/2 ounces of gold. Now granted you would have gotten a slightly more prestigious car for $27,500 back then, say an Acura CL, but with far less safety enhancements.

That all said, I would propose that there is a significant disconnect between current spot gold prices and current pricing for durable goods. Yes, there is a massive deficit and the national debt continues to grow exponentially. And yes, healthcare costs continue to rise at an astonishing rate. But when softening real estate prices and especially lower rent in many markets is factored in, not to mention a possible collapse of used car prices after a tsunami of repossessions, it sure looks like deflation might well be more of a threat than inflation.

In that scenario, I don't see how gold prices can maintain their current lofty levels. Silver has a better shot at preserving recent gains if only because of the delay in it's run-up. The current gold price may well be taken out and driven much, much higher when the wheels finally fall off the bus. But I sense that is at least 3 or 4 years away, and the chances of the current spot gold prices treading water until then is almost nil even with zero interest rates if everything else including equities sustains a massive decline.