Stagflation Trade Is Back ? Gold, Silver Rally After GDP Miss, Hot Inflation

The stagflation narrative roared back to life Friday ? and precious metals wasted no time responding.

Gold prices ? as tracked by the SPDR Gold Shares (GLD) ? jumped 1% to $5,060 per ounce, accelerating after the Bureau of Economic Analysis released weaker-than-expected fourth-quarter GDP data alongside firmer inflation readings.

Silver climbed nearly 4%, pushing back above $81.

The trigger: a troubling combination of slowing growth and sticky price pressures.

U.S. GDP expanded at just a 1.4% annualized pace in the fourth quarter of 2025, a steep drop from the third quarter's 4.4% pace and well below expectations for 3% growth.

At the same time, December's Personal Consumption Expenditures index rose 0.4% month over month, lifting the annual rate to 2.9%. Core PCE ? the Federal Reserve's preferred gauge ? also climbed 0.4% on the month, pushing the year-over-year rate to 3%.

Roughly 30 minutes before the GDP report hit, President Donald Trump posted on social media that the recent government shutdown had cost the U.S. "at least two points in GDP" and renewed his call for lower interest rates, sharply criticizing Fed Chair Jerome Powell.

Chart: Gold, Silver Jump After Disappointing Growth, Hotter PCE

<figure class="wp-block-image size-large"></figure>

Economists Split On The Signal

Heather Long, chief economist at Navy Federal, wrote that "the US economy grew 2.2% in 2025. That’s a slowdown from recent years." She said tariffs, the government shutdown and lower immigration had an impact.

"Data confirms Trump's ?hottest economy' is cooling fast," Peter Schiff said, warning that “stagflation will only get worse.”

Michael Pearce, chief U.S. economist at Oxford Economics, said "the prolonged federal government shutdown and the expiry of the electric vehicle tax credit weighed on Q4 GDP growth, but the core of the economy is resilient."

He said federal government spending "subtracted more than one percentage point off annualized GDP growth due to the fall in hours worked, which will not be repeated in Q1."

Real final sales to private domestic purchasers, a key gauge of underlying demand, rose 2.4% in the fourth quarter. That compares with 2.9% in the prior quarter.

Economist E.J. Antoni said "gov’t purchases tanked almost 5.1%, pulling the headline number down almost a full percentage point."

Chris Zaccarelli, chief investment officer at Northlight Asset Management, said "at first glance the first reading of Q4 GDP was very disappointing – only 1.4% versus 2.8% expected – however, the government was shut down for almost half the quarter."

He added that some estimates place growth closer to 2.4% without the shutdown, though he said adjustments remain uncertain.

Photo: FOTOGRIN/Shutterstock