Gold’s Stealthy Bull Market

Following central bank activity, retail investors are driving up gold prices.
July 20, 2024
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Gold prices are surging, hitting a record $2,449.89 per ounce in May 2024.

gold futures stock price going up

Historically, one thing has been true about gold: 1) gold price spikes coinciding with periods of economic weakness.

But the U.S. economy is doing pretty well by many measures (besides *cough* inflation). GDP is up, unemployment is down, S&P 500 is up

Many retail investors are buying gold following the lead of foreign governments, who have turned to gold due to its ability to store value at a time when geopolitical tensions have increased the risk of government-sanctioned asset freezes:

  1. Russia invaded Ukraine
  2. The U.S. and its allies froze $300Bn in Russian assets, the majority of which is held by European banks
  3. This spooked China, which holds $775Bn worth of U.S. treasuries, and other governments into selling dollars for physical gold
  4. Retail investors, especially the Chinese, are following the activity of central banks

Could it last? Central banks gold-buying momentum continued into 2024.

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