The gold price has climbed to a two-month high of $1,825/oz. Despite the recent uptick gold is still 10% below its all-time high of summer 2020. As Myra Saefong notes in Barron’s, 2021 is set to be the metal’s first losing year since 2018. Its recent “drubbing” is perplexing, says John Authers on Bloomberg. Conditions over the last year should have boosted gold, which does best at times of high inflation (check) and monetary debasement (check). Instead, gold-mining stocks have been the worst-performing sector in the S&P 500 over the last year. Still, something might be about to shift. The ratio of US stocks to gold is running at a 16-year high, more proof, if any were needed, that American stocks are historically overpriced.
Gold bulls had been betting on widespread “revulsion” for paper currencies in the wake of massive money-printing by central banks, says Randall Forsyth in Barron’s. That revulsion has come, but it seems to have boosted cryptocurrencies (dubbed “digital gold”) rather than gold. “Fans of gold…arguably are the most contrary investors” and, at present, “perhaps the loneliest”.
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