Gold up $6.50 today
All roads lead back go gold.
We have almost institutionalized the idea of money printing and fiscal stimulus globally. The next downturn is going to feature an unfathomable amount of experimentation and competitive FX devaluation. It won't work because of demographic headwinds but they will keep throwing money at it anyway.
The one asset that stands above everything in that kind of scenario -- whether it works or not -- is gold. That the latest rally to $1600 from $1450 at the start of December coincides with looser signals from the Fed is telling and it's even more telling that its come alongside a record rally in stock markets.
The bottom line is that gold competes with bonds as a safe haven and traditionally it always came up wanting because bonds had coupons. However now trillions of bonds have negative rates and a basketcase like Greece only pays 0.96% for 10-years. Treasuries pay 1.56%. Is the FX and political risk low enough to make that worthwhile? Hardly.
Technically it's run into resistance here so fresh buying isn't the best course of action until $1611 breaks definitively. There seasonal tailwind for gold also ends next week so be mindful of that.