Okay, so what is going on with the Gold market?
Nothing has changed with regard to the fundamentals for Gold. It is still the only store of stable value over time – the only way that wealth can be safeguarded with certainty through the coming storm.
Though the economy is a disaster, the stock market is in a raging bull. It went up even more when Joe Biden was anointed president by the media. What gives? The answer is that a Biden administration, should it happen, will pump a few more trillions into the economy to ‘stimulate’ it. The market knows this and knows that it will result in stocks going up. Where else would the ‘money’ go?
“What would you rather have? A gold bar, gathering dust in a vault, or stock in a company that’s about to get their fair share of these trillions…?” (here) Keith Weiner
What that means is that Gold is being used to buy dollars in order to exchange for stocks. Not all the Gold, obviously, but sufficient to raise the price of dollars – i.e. drop the ‘price of Gold’. It is realistic to expect that Gold will continue to dwindle for a while, though not as long as stimulus continues. This is the phase of the weak hands being washed out of the Gold market. They bought Gold as a speculation and now they’ve found a better one.
Of note is that this is not just a Joe Biden problem. Donald Trump will, if returned, almost certainly pursue a somewhat similar policy. It may be misguided, but what else can they do? The die was cast when the business-destroying lockdown was put in place.
Around the world, our inept (at best) politicians have caused havoc with their ignorance of how markets function. It will take generations to repair the damage. They will try to hide this fact, by any means possible, for as long as possible.
One day, the weak hands will wistfully discuss the amount of Gold (and silver) that they used to own.