Major Shift Revealed As Western Investors Suddenly Run to Gold
In the past two years, the East has been responsible for a momentous move upward in the gold price, decoupling it from the West’s pricing model. But Western investors have taken back the baton and have been driving gold higher since June 2024.
Tellingly, Western investors are abandoning their old pricing model, too. Instead of participating in the gold market for speculative reasons, they are now buying gold as a safe haven. This is highly bullish because Wall Street has little exposure to gold.
Meanwhile, on a net basis, the East is not selling. In this tight market, the gold price is sharply rising: year-to-date, it’s up more than 30%.
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Goldtent…we came for the Gold We Stayed for the Fight
While we have begun to see professional money mgt. interest in gold and mining stocks, it has been limited so far. Until the stock market rolls over and the MAG 7 crack, it won’t be very much. After the election, and more so, after year end, the competition for outperformance will lead to a massive move into gold, silver and the miners. Usually when stocks have their infrequent bear markets, the economy is weak and bonds see huge inflows. This time even if the economy is weak(likely) inflation and debt issuance is going to limit the attractiveness of bonds. Given the small size of market caps for gold and especially silver and the miners, the flow of capital into the space is going to produce massive returns.