Commodities are casualties of US deficit

A BILLION here, a billion there - and soon you are playing with real money. It was a sad joke in 2008 as the US Treasury threw newly printed money around in quantitative easing. Now the numbers are back to haunt us with President Donald Trump's US$1.5 trillion infrastructure programme funded by - you guessed it - a massive increase in US debt from the current US$20.6 trillion. That is assuming that, after the first rounds of a trade war, the world is prepared to continue to fund the US deficit through the purchase of US Treasuries.

Markets are like drug addicts. They know the damage that debt addiction does, but they cannot resist the debt-induced high that comes with the increased spending. These programmes have an impact on gold as a store of value, and oil as a component of growth.

The defining feature of the gold price chart is that its taken so long to go nowhere. Gold has slipped into a zombie state, largely unmoved by changes in the US dollar, interest rate predictions or any world crisis.