This is gold’s chance to shine, if you’ll pardon the pun, more than seven years after the price reached its all-time high, before plunging into the prolonged bear market.
Numerous factors are converging to cement gold’s investment case at this time.
Catalysts for the explosive gold bull market of 1968-80 were a loss of US monetary and fiscal policy discipline, tensions between major economic powers and a wave of gold buying, led by central banks. We are seeing a repetition of similar events, with:
There are other, equally important, factors in today’s global macro and geo-political picture ‒ aside from the recent US/Iran flare-up ‒ which are very gold-positive:
Historical drivers for the gold price dovetail with today’s risks, since gold is the only financial asset that:
Gold should function as a signalling device, acting as a warning sign and stabilising influence for a global financial system that has overstretched itself. This one has, with the need for unconventional monetary policy passing the point of no return.
The gold price is being held back ‒ potentially increasing moral hazard across the entire global financial system ‒ which is where reforms by the London Bullion Market Association (LBMA) can play a role.
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