Gold keeps going up. While skeptics still think that gold has no place in investment portfolios for its lack of cash flows or cost of storage, the precious metal keeps shining against stocks and bonds as fiat money continues to be under pressure from high levels of debt and big deficits. We are assisting to a change in the current world order in geopolitical, social and economic terms, and every time we’ve had that transition through history, gold has played an important role. In the chart below, you can see the performance of gold vs the S&P500 since the lows of the equity market on Oct 2022. In those 2.5 years gold has outperformed equities by 2200 bps. And as long as the currency debasement continues, it will be difficult for other assets, including equities, to outshine gold, even after taking into account the manipulation of its price by metals desks. The same way some investors front run central banks during QE in the U.S. and the “whatever it takes” moment in Europe, it would appear they’re now doing the same thing with gold. This run should end when responsible behavior comes back to Washington and Brussels. How close are we to that point?
Note: this is not financial advise. Invest at your own risk.
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