Gold’s primary support is growing

Seeking Alpha/Clif Droke

photo of gold king standing tall amidst fallen foes on a chess board“The conspicuous lag in gold’s performance versus equities conceals a more salient observation, however. While gold hasn’t kept pace with the stock market, it has nonetheless held its value in spite of the near-collapse in safe-haven demand last fall. The stability in the gold price was partly because of the corresponding drop in the U.S. dollar index, which allowed gold to remain firm due to its strengthened currency component. Nonetheless, the fact that gold held up so well in the face of declining risk aversion is a real testament to the strength of its bull market which began in 2018.”

USAGOLD note:  So-called bond king Jeffrey Gundlach says the next credit crisis will be worse than 2008 and it will originate in the corporate debt market.  “You never have the same crisis twice,” he says.  If bonds are likely to be at the epicenter of that crisis, gold could become the safe-haven asset of last resort among money managers.

Repost from 1-26-2020

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