Plenty of fuel left in the gold rocket tank

A couple of charts today make the point. Real interest rates have room to fall further:

Gold ETF flows are still very small:

 

AUM proportions dedicated to gold are still WAY down versus previous peaks:

Probably the best chart of all, DXY is still very high:

The lows of the GFC period are 24% below. I see no reason why DXY will not return there as the virus-hampered recovery takes years. Especially under a Biden Administration that will eschew Trump’s tariffs.

The last DXY bear market from 2002 to 2011 sank 42%. Gold rose 700% over that period.

It takes zero imagination to see gold moving to $3000 from here if DXY falls 20%, let alone further.

David Llewellyn-Smith
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