Gold Price Holds Gains Overnight
London (July 7) Looking at the above headlines, can you see which thing doesn't belong? More on Wells Fargo's Gold prediction later in the day. For now this is what happened overnight. Ratings agencies are starting to downgrade sovereign credit as a function of easy money and malinvestments. Italian banks are beginning to prohibit short selling in an attempt to quell reality. Euro banks are below their lows of 2011. Bill Gross of Janus funds and PIMCO before says US Bonds are pricing 30 yr inflation at 1.4% and that is " Too low". What did Gold think of all this? See for yourself.
Gold Is Money. That is all
Gold has had such a run up with inflows in Physical purchases in Coin form, US ETFs, and of course futures. It has benefitted from the uncertainty surrounding Brexit. And most recently the renewed Chinese interest is a direct by product of the Yuan being debased against other currencies. So when an analyst calls for a $300 drop in Gold, we do not worry. We welcome it as a buying opportunity if the world continues on its course. If it does drop, that is because more people are selling what is making them money to support what is not making money. Not unlike Germany during hyperinflationary times. They sold their Gold first, and regretted it later.But when Gold is called a "Commodity" by that same person, we respectfully disagree. Gold is money. And its behavior is saying as much. A Risk-Off asset? Gold is a risk-off asset like the USD is. They are both currencies that people put their savings in to avoid calamity on the other side of the globe. Always have, always will. But what happens when the last FIAT currency standing is the USD and it debases? What will it debase against? Gold.