Gold Investors Are Betting It Really Is 2008 All Over Again
Comment of the Day

March 23 2020

Commentary by Eoin Treacy

Gold Investors Are Betting It Really Is 2008 All Over Again

This article by Elena Mazneva and Ranjeetha Pakiam for Bloomberg may be of interest to subscribers. Here is a section:

“If its price trajectory proves similar to 2008, we could see the precious metal’s benefits resurging as market stress continues to assert itself,” said Catherine Doyle, an investment specialist in the real-return team at Newton Investment Management. “We continue to have significant exposure for this very reason.”

Eoin Treacy's view

Anyway we look at it, the efforts of governments and central banks to support economies and reflate asset prices are going to come at the expense of the purchasing power of their currencies. Therefore, any asset that offers insulation from currency devaluation, either by offering a higher yield or limited supply is likely to benefit.

Gold bounced today from the region of the trend mean and the psychological $1500. A sustained move below the recent low would be required to question near-term scope for continued upside.

Silver also firmed and looks increasingly likely to at least unwind its deep oversold condition.

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