Why the big move in gold?

[ochotona]

Gold at 2000 that was short-lived

[pmbug]

[mathjak107]

Gold at 2000 that was short-lived

the higher rates on interest bearing stuff and bitcoin getting a lot of attention are strong head winds

[dualstow]

from the WSJ:

• A fall in real and nominal rates after an inflation report in-line with economists expectations;

• A return of fears about the banking sector;

• An influx of investor money into commodities, motivated in part by recently rising oil prices; and

• Comments from Federal Reserve Gov. Christopher Waller Friday that he would like to see more shorter-dated Treasury securities in the central bank’s portfolio.

https://www.wsj.com/livecoverage/stock- ... Eu8?page=1

Meanwhile, the Financial Times mentions “ phenomenal’ buying by Chinese investors ”
https://www.ft.com/content/72ae7a4a-83f ... 78204c1d5d

[dualstow]

“
Gold Is Rallying. It Isn’t About Inflation This Time.
The metal serves as a hedge against fear itself, making it an appealing asset for our times

https://www.wsj.com/finance/commodities ... e-bf85f08c

EDIT: Beneath the story, a commenter wrote:

John Maynard Keynes never wrote that gold was a "barbarous relic".
John Maynard Keynes wrote "the gold standard is already a barbarous relic."

[ochotona]

Congratulations! $2200+ for the month and quarterly closes!

[yankees60]

https://www.fidelity.com/learning-cente ... _weekly_AT

March 29, 2024
Estimate Time
5 min


Gold, oil, cocoa prices rally
Commodity prices have generally been falling, but some have risen a lot in 2024. Here's why.
Active Trader News

[sophie]

Whoah!! Almost 2300.

I have the same question as the title of this thread....is this because people think the Middle East situation is spinning out of control? Or that some kind of economic apocalypse is being predicted and I just haven't noticed? Or, do we indeed have inflation, it's just not reflected in the CPI figures? I've been noticing increased prices lately...big time actually, grocery costs are a good 20-25% higher compared to last fall. And there have been articles about how people depending on Social Security report that the SS COLA increases are not anywhere close to what they need to keep up their standard of living. Another way of saying the same thing.

The WSJ articles are just educated guesses, by people with no more information than we have.

[dualstow]

And finally it’s not moving in lockstep with stocks, which *may* be down because of skepticism of rate cuts. Or maybe it’s just a pullback after a strong quarter.

I hope technovelist is having a treasure bath.

[yankees60]

https://www.mauldineconomics.com/global ... telling-us

What is gold telling us?
Ed D'Agostino Ed D'Agostino
|
April 2, 2024

[pmbug]

...
I have the same question as the title of this thread...

It's mostly being driven by foreign central banks and retail demand from China and India. Wall Street (as measured by ETF flows) is still largely asleep on gold.

[xmj]

If you want to have even more fun, look at gold priced in CHF, YTD charts.

That move is really quite something.

[barrett]

Whoah!! Almost 2300.

I have the same question as the title of this thread....is this because people think the Middle East situation is spinning out of control? Or that some kind of economic apocalypse is being predicted and I just haven't noticed? Or, do we indeed have inflation, it's just not reflected in the CPI figures? I've been noticing increased prices lately...big time actually, grocery costs are a good 20-25% higher compared to last fall. And there have been articles about how people depending on Social Security report that the SS COLA increases are not anywhere close to what they need to keep up their standard of living. Another way of saying the same thing.

The WSJ articles are just educated guesses, by people with no more information than we have.

This post got me interested in searching for alternative measures of inflation (that are not tied to the USG's interests in keeping those measures low). Does anyone have favorite sites that they check? I came upon shadowstats.com for which the CPI-U inflation link is here:

https://www.shadowstats.com/alternate_d ... ion-charts

But that site seems to drastically overstate inflation. The top graph shows the "real" rate of inflation running at about 6% on average (just eyeballing the line on the chart). Using the rule of 72, that would mean that in the 24 years since 2000, the purchasing power of the USD has been cut in half twice. While certain categories of goods and services have obviously shot up in price, I just don't feel that a 2000 dollar is only worth 25 cents now.

A couple of things that may cloud my picture of reality:

1) My wife does nearly all of our grocery shopping
2) We own our home outright and have not been in the market for a new place

Before I post this, I should emphasize that I don't actually know for sure that the rule of 72 works in reverse the way that I am assuming.

[yankees60]

Whoah!! Almost 2300.

I have the same question as the title of this thread....is this because people think the Middle East situation is spinning out of control? Or that some kind of economic apocalypse is being predicted and I just haven't noticed? Or, do we indeed have inflation, it's just not reflected in the CPI figures? I've been noticing increased prices lately...big time actually, grocery costs are a good 20-25% higher compared to last fall. And there have been articles about how people depending on Social Security report that the SS COLA increases are not anywhere close to what they need to keep up their standard of living. Another way of saying the same thing.

The WSJ articles are just educated guesses, by people with no more information than we have.

This post got me interested in searching for alternative measures of inflation (that are not tied to the USG's interests in keeping those measures low). Does anyone have favorite sites that they check? I came upon shadowstats.com for which the CPI-U inflation link is here:

https://www.shadowstats.com/alternate_d ... ion-charts

But that site seems to drastically overstate inflation. The top graph shows the "real" rate of inflation running at about 6% on average (just eyeballing the line on the chart). Using the rule of 72, that would mean that in the 24 years since 2000, the purchasing power of the USD has been cut in half twice. While certain categories of goods and services have obviously shot up in price, I just don't feel that a 2000 dollar is only worth 25 cents now.

A couple of things that may cloud my picture of reality:

1) My wife does nearly all of our grocery shopping
2) We own our home outright and have not been in the market for a new place

Before I post this, I should emphasize that I don't actually know for sure that the rule of 72 works in reverse the way that I am assuming.

My intuition and quick analysis says that it does. If you started with 25 cents today, in 12 years it'd be 50 cents and, then 12 more years 100 cents. Why would it not work going backwards?

[barrett]

Should have checked before I posted that, Vinny. Yes, it works in reverse. This is the Investopedia link:

https://www.investopedia.com/terms/r/ru ... 20%3D%2012).

But back to my main point. Looking for a reliable site for the "real" rate of inflation, not the official CPI-U rate (which I would be heartened to hear is actually accurate).

[ArthurPooh]

But back to my main point. Looking for a reliable site for the "real" rate of inflation, not the official CPI-U rate (which I would be heartened to hear is actually accurate).

An alternative explanation of the CPI not reflecting the true inflation rate is the suppression of purchasing power of the average American. Rich Americans and Asian exporters don't spend all that new money on groceries and other stuff measured by the CPI: they buy financial assets and real estate. Thus the consumer prices don't rise that much, while asset valuations get higher and higher.

[Smith1776]

Look at gold go!

[pmbug]

... Wall Street (as measured by ETF flows) is still largely asleep on gold.

That seems to be changing...

Gold-backed exchange-traded products are showing signs of life as they attracted some attention from North American investors last month, even as European markets continued to see significant outflows, according to the latest data from the World Gold Council (WGC).

The WGC released its latest report on monthly ETF flows on Tuesday, which showed that global outflows dropped to their slowest rate since February 2020 and are 21% lower than the month-end record of 3,915t in October.

The analysts noted that North American-listed funds saw holdings actually increase by 4.8 tonnes, valued at $360 million.
...

https://www.kitco.com/news/article/2024 ... ar-low-wgc

[seajay]

But back to my main point. Looking for a reliable site for the "real" rate of inflation, not the official CPI-U rate (which I would be heartened to hear is actually accurate).

An alternative explanation of the CPI not reflecting the true inflation rate is the suppression of purchasing power of the average American. Rich Americans and Asian exporters don't spend all that new money on groceries and other stuff measured by the CPI: they buy financial assets and real estate. Thus the consumer prices don't rise that much, while asset valuations get higher and higher.

If your intent is to leave nowt for heirs then CPI is a reasonable measure of spending. If you instead intend to leave to heirs then thirds house, stock, CPI as a inflation rate might be a reasonable measure. CPI tends to lag house/stock price inflation due to technology - lower prices from the likes of fields of people gathering a harvest to instead be a single man and machine doing the same work more quickly/inexpensively - that helps to lower prices (slower inflation rate).

For us, (generational/family) stock/house/CPI prices inflation is well matched by a stock/house/gold asset allocation. Spend the dividends, don't have to find/pay rent, draw a additional SWR - as though gold yielded a dividend.

[yankees60]

https://money.com/gold-vs-stocks-perfor ... aily_money

Investing
Gold

Gold Has Outperformed the S&P 500 So Far This Year
By: Pete Grieve
Editor: Julia Glum
Published: Apr 08, 20244 min read

[yankees60]

https://www.etf.com/sections/features/g ... ead%20More

Gold's Rise Taunts Advisors Who've Seen This Before
Investors wonder if gold's surge past $2,300 is a breakout or another fake-out.


Rob Isbitts
|
Apr 09, 2024
Reviewed by: etf.com Staff
,
Edited by: Ron Day

[yankees60]

https://www.wsj.com/finance/commodities ... m-c65fed18

FINANCE
COMMODITIES & FUTURES
Gold Futures Hit Another Record on Geopolitical Tensions, Fed Hopes
Investors will be paying close attention to U.S. CPI inflation data and Fed meeting minutes on Wednesday
By
Joseph Hoppe
Follow
Updated April 9, 2024 5:18 am ET

[yankees60]

https://secure.money.com/gold-iras/lp/b ... eek&wafid=

Best Gold IRAs
Investing, buying, and trading in precious metals is one way to diversify your retirement portfolio. We’ll help you choose the best companies so you can get started investing in Gold, Silver, Platinum, or Palladium today.
Last Updated: January 31, 2024

[dualstow]

I wonder if the B’head position is still “I have a gold wedding ring, har har” or “They hawk gold coins on commercials on Fox News, therefore all sales of the commodity constitute a hoax.”
Well, maybe they’re right. Maybe the price will come back down to earth. Right now, though, I’m very glad to be holding it.

[Smith1776]

Honestly I’m surprised there isn’t a thread on the knuckleheads forum right now where they’re all trying to convince themselves that gold is just a bubble… for the past 5000 years.