Gold safety demand will endure beyond coronavirus

Seeking Alpha/Clif Droke

graphic image of billionaire investors stacking bars of gold in a large vault
“The takeaway from falling real yields is that there will be plenty of liquidity in the months ahead, and the Fed will almost certainly be forced to maintain an accommodative monetary policy in the foreseeable future. This is certainly good news for gold investors since non-yielding gold typically does well in a falling interest rate environment due to the diminished competition from lower-yielding bonds. What’s more, since falling rates suggest that economic growth will remain sluggish in the intermediate term, this is another fact that justifies owning long positions in gold bullion and gold ETFs as a hedge against future economic uncertainty.”

USAGOLD note 1:  Coins and bullion are the choice for most private safe-haven investors.  ETFs are the province of big funds and institutions interested in making a price bet.  “Well, I worked on Wall Street and in the hedge fund industry for decades,” wrote James Rickards recently. “I also lived among the players in New York and Greenwich, Connecticut, at the same time. I’ve met the top hedge fund gurus in private settings. And here’s the thing: I’ve never met one of them who does not have a large hoard of physical gold stored safely in a nonbank vault. Not one.”  Institutionally, in other words, the big fund managers own ETFs.  Personally, they own the physical metal in the form of allocated coins and bullion.

USAGOLD note 2:  We can only hope that the word “coronavirus” fades as quickly from the headlines as it appeared.


Image courtesy of Visual Capitalist

Repost from 2-10-2020

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