Be careful not to look at gold only against the dollar. Gold is at its highest against many FIAT currencies
But even the $2,000 an ounce level is intriguing: despite clearly positive real rates and the appreciation of the greenback, gold is close to all-time highs. Looking forward, two scenarios are possible: o 1) Gold is overvalued and should soon depreciate o 2) Gold is seen as a safe haven against geopolitical uncertainty, but also against the political disorder in Washington and the declining confidence in the Fed. If this is the case, a possible depreciation of the dollar and a fall in the real interest rate could benefit the yellow metal. Bottom-line: Gold remains an attractive portfolio diversifier Source chart: Tavi Costa, Bloomberg
US inflation data for Oct undershoot consensus
Headline dropped to +3.2% from 3.7% in Sep vs 3.3% expected, Core CPI dropped to 4.0% from 4.1% vs 4.1% expected. Dollar and Yields plunge. - Following two months of higher than expected US CPI numbers (mainly driven by higher energy prices and healthcare costs), the October CPI print was expected slow materially (from 3.7% to 3.3% yoy on headline CPI) while the core was expected to remain unchanged at 4.1%. But today’s CPI print is a miss across the board with both headline and core numbers coming in below expectations on both a sequential and annual basis. - Headline CPI came in at 3.2%, below the 3.3% expected, while MoM CPI also missed expectations, being vs. consensus at +0.1% and sharply below last month's 0.4%. Source: Bloomberg, HolgeZ, www.zerohedge.com
Reminder that this happened when the Gold Spot ETF was approved
Source: Bitcoin for Freedom
China reserve gold holdings as per IMF
Source: Bloomberg
Explained: India’s Gold Demand During Diwali - by Elements, Visual Capitalist
In India, gold’s significance goes far beyond investment and jewelry. The yellow metal is woven into India’s cultural history and is revered by a population of over 1.3 billion.
Even with gold near ATHs, central banks are still buying record tonnage of yellow metal...
Source: FT
As highlighted by Tavi Costa, despite the recent push toward new highs, gold remains severely under-allocated
In fact, 71% of US advisors have little to no exposure to the metal. Similar to how Central banks continue to aggressively accumulate the metal, conventional investment portfolios have yet to take steps to find true diversifiers. Sources: Tavi Costa, BobEUnlimited
Here's the downside risk on gold. Either this longstanding correlation is broken or inflation is grossly understated and real rates remain negative
Source: Henry Smith
