This table explains why markets were soooo... happy yesterday.
As shown by Charlie Bilello: as compared to their December forecasts, the Fed is expecting higher Real GDP growth (2.1% vs. 1.4%), lower Unemployment (4.0% vs. 4.1%), & higher Core PCE Inflation (2.6% vs. 2.4%) but is still anticipating 3 rate CUTS this year. This uber-dovish and bullish for risk assets and gold...
Look at this base on silver... could it follow the steps of gold ?
Source chart: J-C Parets
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
