The old knock on gold is dead
The main reason that assets are great to have is yield. If you own shares of something, you own a part of that company and it often pays a dividend. Returns are at the core of capital markets.
If you buy gold, your money is dead. There's virtually no utility in having it and absolutely no yield.
That's the big reason that central banks have slowly pared down gold reserves in favor of bonds. Now here we are in a situation where bonds yield as little (or sometimes less) than gold. There are $12 trillion in bonds that pay no yield. Germany pays negative 32 basis points. This week France, Austria and Sweden hit zero.
If the choice is between gold or a bond that yields 5%, that's one thing but the balance changes when it's gold versus something that yields nothing. Add on the chance of more QE, a currency war or a real war and gold looks better and better.
It's not going to be a straight line but we're back in an easing cycle. The last easing cycle ended with gold at $1900. If central bank easing unfolds as expected, we will get back there. If there's a recession or war, it will go even higher.
But forget all that, here's a monthly chart. We're not at the monthly close yet but this has all the makings of a major breakout that came on major fundamental news. It doesn't get any better.
