In this current world of rampant inflation, hiked interest rates and collapsed equity prices, gold presents as a very intriguing asset to analyse. Especially as the market is now positioning for an earlier pivot off high interest rates than previously anticipated.
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I hosted Adrian Ash, Director of Research at BulllionVault, one of the largest metal marketplaces, to discuss all things gold and investing.
We chatted about the historical performance of gold, this quirky shiny thing that humankind has been obsessed with for thousands of years.
Last year, I crafted up a deep dive into the price drivers of gold, looking at whether it really did kick on during times of uncertainty or high inflation. It is something Adrian discussed extensively. The below chart shows how gold has done reasonably well amid market pullbacks; we chatted about why.
Against inflation, the correlation is a little less clear. We chatted about why this is, and how gold has really tracked interest rates – or, to be exact, the expectation of interest rates – rather than inflation.
We also touched on how dollar strength plays into the dynamic, as well as the always-interesting geopolitical climate.
There was no getting around the current climate in 2023, however, and how it pertains to gold. Since the start of the year, the market has bounced off the expectation that central banks will pivot off high interest rates sooner than previously anticipated. Adrian and I discussed this, and what consequences it has for buying gold. Strangely, equity investors and gold bugs seem to be in the same boat at the moment, hoping that the Fed turns dovish.
It is a fascinating time in the economy, and it has real implications for gold. We covered a fair bit of ground in this episode – if you’re considering diversifying into metals or curious as to the historical performance of gold, and its correlation to other asset classes, then you may get something out of it.
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