gold was covered recently by the economist. here's an article (paywalled) https://www.economist.com/finance-and-e ... er-way-why
Very brief summary:
- only 1.5% of institutional investors assets are in gold
- over 2/3rds of family offices invest in gold
- China and India account for half of consumer purchases of gold. In China there's a real estate crisis & the stock market hasn't been doing well.
- central-bank gold reserves have climbed to 11% (a 20 year high) from 6% in 2008
One interesting point is that historically there has been a strong relationship between the gold price and interest rates. But in the last few years, this has changed!
Very brief summary:
- only 1.5% of institutional investors assets are in gold
- over 2/3rds of family offices invest in gold
- China and India account for half of consumer purchases of gold. In China there's a real estate crisis & the stock market hasn't been doing well.
- central-bank gold reserves have climbed to 11% (a 20 year high) from 6% in 2008
One interesting point is that historically there has been a strong relationship between the gold price and interest rates. But in the last few years, this has changed!
Demand from central banks, which invest for security reasons rather than returns, also helps explain why gold’s relationship with interest rates has broken down. The metal usually does poorly when real yields on safe government bonds are high, which means they provide a solid return even after inflation. Conversely, when returns to the safest bonds are low, gold tends to rally. In a low-yield environment, investors are more likely to consider an asset that produces no income. Since the end of 2021, however, the once-trusty correlation has collapsed. Gold has climbed in price even as yields on ten-year inflation-protected American Treasuries rose from minus 1% to around 1.8%. When real yields were last this high, gold was worth around $1,000 per troy ounce, almost two-thirds less than its current price.
Statistics: Posted by pseudoiterative — Fri Nov 08, 2024 1:34 am