Thanks for the article, Mike. As always, a well-researched offering from you. I can say with certainty that I am much more of a newb when it comes to the arena of investing in gold/metals. I really just began my *academic journey* into the precious metals investment arena maybe a year-and-a-half ago, and my current understanding/knowledge base even now leaves much to be desired, I assure you. With all that said, I do have a personal narrative for where gold is currently trading and how it’s gotten here that at least makes a lot of rational sense to me when you look at the market fundamentals and trying to get one’s head around the larger macro flows.
The long story short is that I agree with nearly all that you’ve written in this piece in terms of fundamental drivers of macro flows into gold over the past 1-3 years as well as the competing fundamental forces that are acting to support vs resist price movement in the commodity.
I guess the one main thing that I have in my personal narrative that differs from what you’ve presented, in particular, in the emphasis with which I see this “fundamental macro driver” which has been acting to support/drive northward the gold price in recent years is the buying that was done by central banks and WHY it was done. To end my comment here bc it’s getting long…I feel that the act of the U.S. confiscating Russian reserve assets in response to their invasion of Ukraine was one of those geopolitical moves that will forever have lasting effects on the global geopolitical state of affairs well beyond our lifetimes. I think the repercussions of that move (I won’t get into the judgement of the appropriateness of them or political opinions, etc here) have been, and will continue to be, quite massive and quite under- appreciated (particularly by the political leaders in the West) for quite some time to come, I’m afraid. It sent a signal to basically every country in the world who isn’t one of our closest allies…and it was a loud message imo…
And as you noted, only recently have westerners caught onto the trade - so we’ll be buying the commies’ bags for some time to come, I suspect…
My whole point here: I think central banks will continue buying gold over US treasuries more and more and more so, until they start buying some bitcoin too, of course…so I think big picture, we’re still actuallly kinda early in this gold bull run, imo. I personally have a much greater % of my net worth allocated to Bitcoin and Bitcoin-adjacent assets (equity in miners, $MSTR equity and a couple options, some shit coins, etc…
*academic journey = listening to many hours of podcasts in which gold “experts” were being interviewed to inform the greater investment community on the merits of investing in gold and other precious metals, basically shilling their bags, and oh yeah, also trying (painfully at times) to explain why Bitcoin is too scammy to be taken seriously as a store-of-value alternative to gold…I ignored their advice on the latter and tried my best to learn from those folks on
“I feel that the act of the U.S. confiscating Russian reserve assets in response to their invasion of Ukraine was one of those geopolitical moves that will forever have lasting effects on the global geopolitical state of affairs well beyond our lifetimes.”
Thanks for the article, Mike. As always, a well-researched offering from you. I can say with certainty that I am much more of a newb when it comes to the arena of investing in gold/metals. I really just began my *academic journey* into the precious metals investment arena maybe a year-and-a-half ago, and my current understanding/knowledge base even now leaves much to be desired, I assure you. With all that said, I do have a personal narrative for where gold is currently trading and how it’s gotten here that at least makes a lot of rational sense to me when you look at the market fundamentals and trying to get one’s head around the larger macro flows.
The long story short is that I agree with nearly all that you’ve written in this piece in terms of fundamental drivers of macro flows into gold over the past 1-3 years as well as the competing fundamental forces that are acting to support vs resist price movement in the commodity.
I guess the one main thing that I have in my personal narrative that differs from what you’ve presented, in particular, in the emphasis with which I see this “fundamental macro driver” which has been acting to support/drive northward the gold price in recent years is the buying that was done by central banks and WHY it was done. To end my comment here bc it’s getting long…I feel that the act of the U.S. confiscating Russian reserve assets in response to their invasion of Ukraine was one of those geopolitical moves that will forever have lasting effects on the global geopolitical state of affairs well beyond our lifetimes. I think the repercussions of that move (I won’t get into the judgement of the appropriateness of them or political opinions, etc here) have been, and will continue to be, quite massive and quite under- appreciated (particularly by the political leaders in the West) for quite some time to come, I’m afraid. It sent a signal to basically every country in the world who isn’t one of our closest allies…and it was a loud message imo…
And as you noted, only recently have westerners caught onto the trade - so we’ll be buying the commies’ bags for some time to come, I suspect…
My whole point here: I think central banks will continue buying gold over US treasuries more and more and more so, until they start buying some bitcoin too, of course…so I think big picture, we’re still actuallly kinda early in this gold bull run, imo. I personally have a much greater % of my net worth allocated to Bitcoin and Bitcoin-adjacent assets (equity in miners, $MSTR equity and a couple options, some shit coins, etc…
*academic journey = listening to many hours of podcasts in which gold “experts” were being interviewed to inform the greater investment community on the merits of investing in gold and other precious metals, basically shilling their bags, and oh yeah, also trying (painfully at times) to explain why Bitcoin is too scammy to be taken seriously as a store-of-value alternative to gold…I ignored their advice on the latter and tried my best to learn from those folks on
“I feel that the act of the U.S. confiscating Russian reserve assets in response to their invasion of Ukraine was one of those geopolitical moves that will forever have lasting effects on the global geopolitical state of affairs well beyond our lifetimes.”
YES, agreed 💯
Check out this piece I wrote (I think before you subscribed) in Feb 2022. US hadn’t gone through with sanctions yet: https://faybomb.substack.com/p/crazy-like-a-fox?utm_source=publication-search