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GOLD: Rocks Or Stocks! Why Gold Continues to Outperform the S&P?
David has highlighted this Insight as a Top Pick
891 Views26 Aug 2024 07:20
Boomeranged on Fri, 13 Sep 2024 09:56
Average daily volume of CME micro gold futures is at all time highs as retail investors pile in. Gold is at all-time highs as a result of quickly declining real rates and renewed pressure on USD. The need for global central banks to diversify away from the dollar is also helping the price of gold.
SUMMARY
- Gold's price advance is idiosyncratic moving against historical norms of estimated inflation and real rates.
- Demand from large central banks is not currently a factor in price discovery as the PBOC has stopped buying. Gold's safe-haven status has also declined since GFC in 2008/09.
- Easier monetary policy from the Fed and higher actual inflation continue to fuel lower real rates and provide substantial support for Gold's price.
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