Yahoo! Finance pointed out the other day that “The yellow metal has forged meteoric gains this year.”
Jared Blikre, Yahoo’s finance editor sought to explain it in an article whose headline we borrowed for this piece, “WHY GOLD IS OUTPERFORMING NEARLY EVERYTHING!”
Here is some of what he wrote:
According to BofA Global Research, gold funds just absorbed the largest inflows in four weeks, attracting $1.1 billion. Yet, the broader trend has actually seen $2.5 billion in outflows year to date, suggesting that underlying strength is coming from outside traditional fund flows.
Central banks — especially those of developing countries — have been buying the barbarous relic at a record clip. According to the World Gold Council, central banks have purchased 290 tonnes in the first quarter alone, beating out the prior Q1 record from 2023 and setting CBs on a path to record gold purchases in 2024 that are estimated to easily eclipse 1,000 tonnes.
“Not only is the long-standing trend in central bank gold buying firmly intact, it also continues to be dominated by banks from emerging markets,” wrote
In that regard, Turkey tops the buy list this year with 30 tonnes purchased in the first quarter — lifting its gold reserves to 570 tonnes. China bought 27 tonnes in Q1, making it the 17th consecutive quarter of purchases and also bringing its holdings to 2,262 tonnes. Other notable purchasers include India, Kazakhstan, the Czech Republic, Oman, and Singapore.
The central bank buying spree has solidified gold’s status as a reserve asset. According to BofA, gold has now surpassed the euro to become the world’s largest reserve asset second only to the US dollar, representing 16% of the reserve pool.
The precious metal’s performance can be attributed to its unique position as a real asset with one of the lowest correlations to stocks across asset classes, making it a safe haven from market swings and inflation.
The popular financial press doesn’t like to write about gold, and often when it does it uses disparaging terms like “gold bug.” There are several reasons for that. One is that Wall Street and the major banks provide the financial press and bubblevision TV channels with most of their revenue. And big Wall Street and the banks don’t like you to own assets like gold that you take into your own possession. The prefer you to keep your assets “on account.” They can make money hypothecating your stocks to others and they have more opportunities to churn adjust your portfolio when your assets are in house.
So, we are glad for the attention we get from articles like the one above. It’s pretty hard to ignore gold as this point anyway.
We have been calling de-dollarization the most important monetary megatrend of our time, so we don’t blame others writing about gold for featuring it. But that is the effect of our corrupted, unbacked, irredeemable fiat monetary system. Sure, the central bankers of the world are moving to gold. But they are doing so not just for a change or to keep busy. They are moving to gold because they now recognize that the US dollar will go the way of all fiat currencies.
Or to put it differently, the dollar will return to its commodity value which is paper and ink. Used paper and ink.
