Central banks are hoarding gold like never before...
Source: BofA
Central banks demand matters a lot more than ETF flows for gold
Source: Bob Elliott, Bloomberg, Macrobond, The Daily Shot
Gold has Hit a Record High Even During ETF Outflows
Source : FT
What is a store of value?
A good store of value preserve the amount of goods / services money can buy over time. Example (simplified): - The average gold price in 1920 was $20.68 per ounce. Today it is worth $2,100 per ounce. A 100 fold increase. - The average house price in the US in 1920 was between $5,000 and $6,000. The average sales price of a new home in 2023 was $492,000. A 90 to 100 fold increase.
As highlighted by Tavi Costa:
The recent surge in gold prices, despite a lack of corresponding growth in assets managed by related ETFs, suggests that central banks' purchases have likely been the primary catalyst for the rally. Although there's been a record pace of metal accumulation, central banks currently hold a much smaller proportion of gold compared to historical levels. Back in the late 1970s and early 1980s, these institutions held around 80% of their balance sheet assets in gold, whereas today it's less than 20%. Will they continue to accumulate gold going forward? If we come back to the historical average (in terms of % of reserves), there is massive pent up demand ahead Source: Tavi Costa, Bloomberg
BIDEN BUDGET SEES US DEBT HITTING $45 TRILLION IN A DECADE
Do you think gold and digital gold trading at new all-time-highs is a coincidence? #store of value Source cartoon: hedgeye
Some interesting quotes by Donald Trump about rates, the dollar, macro and gold thru Ronnie Stoeferle:
- "I am a low interest rate person. If we raise interest rates and if the dollar starts getting too strong, we're going to have some very major problems." - "This is the United States government. First of all, you never have to default because you print the money." - "The Dollar is too strong. Our companies can’t compete with them now because our currency is too strong. And it’s killing us." - "The golden rule of negotiation: He who has the gold makes the rules." - "We used to have a very, very solid country because it was based on a gold standard. We don’t have the gold. Other places have the gold." - "I have been complaining about currency devaluations for a long time. I believe that we will all eventually, and probably sooner than people understand or think, be on a level playing field because that’s the only way its fair."
A "Goldilocks" us job report -> risk assets
Gold and digital gold rally after a soft US Jobs report. February Non-Farm-Payrolls beat estimates with 275k new jobs BUT 2 months revisions look notable with -167k. Unemployment rate rose to 3.9% from 3.7% and hourly earnings weaker than expected w/+0.1% MoM. January’s blow-out release has been relativized. Source: HolgerZ, Bloomberg
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