For the past five days, gold—and silver even more so—has shed the atypical tendency it displayed in recent months of failing to act as a safe haven during times of crisis.
This cannot be explained solely by the psychological impact of the 4,000 round-number mark.
Is a weakening dollar to be expected? Not due to the war. Is yen weakness significant for gold? Is the Fed’s interest rate policy shifting? Are there signs of declining gold supply? Are central banks making a new run on gold?
It remains to be seen whether this current strength in gold will persist and whether the underlying reasons will become more apparent.
Gold is now competing with oil—a driver of inflation—and since Tuesday, it has outperformed the rise in government bond yields, with 5-year yields exceeding 10-year yields. It remains to be seen whether gold will now resume its traditional role as a safe haven.
I am participating in this anticipated upward trend—albeit with all due modesty—but I will be keeping a close eye on the causes and outlook for gold.
A second surge in volatility would serve as a confirming signal in the short term.
wish good trades @all
