The S&P 500 just had its worst first half in more than 50 years.
Based on CPI, if you’re in cash, you’re losing 8.5% a year.
This was the worst start to the Bond Market since 1842.
So what do you think gold is doing in that environment?
Down near new 52-week lows…
It’s not an inflation hedge. It’s not a safe haven. It’s just a rock.
And there is nothing wrong with rocks.
If I can sell rocks at higher prices than where I buy them, then I’m all for it.
But that’s just not the trend here, obviously.
It’s been sideways to down for almost 2 years now.
But when you zoom out, Gold isn’t even above its prior cycle highs. It’s well below it actually:
The strength of the US Dollar has put a ton of pressure on Gold over the past decade.
Look how much better Gold has done when priced in other important currencies around the world:
If you’ve owned Gold priced in other forex, you’ve been able to do ok.
But if you own ETFs or Futures here in the United States, then you’ve had a really hard time.
Gold is one of those things that I feel better treating it as a currency and less of a commodity.
You can argue fundamentally, and in business, that it is probably a commodity. And that’s fine.
Strictly from a market analysis perspective, I’ve found that viewing it through the lens of a currency investor is the best way to approach Gold prices.
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