Do you believe that the price of gold will go higher if there is additional turmoil? Tariffs, global slowdown, yield curve, etc.
Is gold really a barbarous relic? Or is it an asset worth holding in a portfolio? Today, there are a few billionaires that have begun to add positions of gold in order to hedge against turbulent times. What exactly does a Fed rate cut mean for the price of gold?
Is a Fed rate cut all but guaranteed this year, thanks to low inflation? | Fox Business
www.foxbusiness.com/economy/is-a-fed-rate-cut-all-but-guaranteed-this-year-thanks-to-low-inflation
Ray Dalio Increased His Exposure To Gold In Q1 2019 | Kitco News
www.kitco.com/news/2019-05-23/Ray-Dalio-Increased-His-Exposure-To-Gold-In-Q1-2019.html
Bond king Jeffrey Gundlach: ‘I am certainly long gold’
www.cnbc.com/2019/06/13/bond-king-jeffrey-gundlach-i-am-certainly-long-gold.html
Paul Tudor Jones says Fed rate cuts are coming and this is what investors should do
Billionaire Sam Zell Buys Gold for First Time in Bet on Tight Supply – BNN Bloomberg
www.bnnbloomberg.ca/billionaire-sam-zell-buys-gold-for-first-time-in-bet-on-tight-supply-1.1200159
Gold Price Going To $1,700 Soon Says Billionaire Paul Tudor Jones – Bloomberg | Kitco News
XAUUSD Chart – Gold Spot US Dollar Price — TradingView
www.tradingview.com/symbols/XAUUSD/
Effective Federal Funds Rate | FRED | St. Louis Fed
fred.stlouisfed.org/series/FEDFUNDS
XAUUSD: 1346.59 ▲+0.35% — TradingView
www.tradingview.com/chart/?symbol=FX%3AXAUUSD
Bear Stearns collapses, sold to J.P. Morgan Chase – HISTORY
www.history.com/this-day-in-history/bear-stearns-sold-to-j-p-morgan-chase
Central Bank Gold Buying at Highest Level in Half a Century
It’s no secret that central banks hate gold. If they could press a button and destroy every last grain of gold that has ever been produced, they would do it. Gold has always been the ultimate restraint on the ability of governments and central banks to create money out of thin air ad infinitum. Even destroying the gold standard, closing the gold window, and moving to a system of floating fiat currencies couldn’t dull the appeal of gold to investors and consumers worried about the purchasing power of their currency.
That’s why central banks have long sought to collude to keep gold’s price low. Whether it was coordinating sales of gold to depress the gold price, loaning out their gold stocks, or other methods, central banks have done everything in their power to minimize the importance of gold, to no avail.
During the last financial crisis more and more investors realized the ability of gold to safeguard the value of their assets, and so they piled into gold with abandon. The result has been a steady increase in gold’s price and a return of gold to many investors’ portfolios. And now that central banks realize that they won’t be able to destroy gold, they seem to have thrown in the towel. If you can’t beat them, join them.
Gold buying by central banks in 2018 reached levels that hadn’t been seen in nearly half a century, with 651.5 tonnes of gold purchased. That’s a 74 percent increase over 2017. Russia in particular made large purchases, its largest ever, with much of the gold purchased coming from the country’s own gold production. That’s part of a move by many central banks to lessen their dependence on the dollar.
In that sense central banks are no different than any other investor. They realize that remaining completely dependent on the dollar is a risky investment. Whether it’s the risk of being cut off from the US financial system or the risk of dollar devaluation due to the Federal Reserve’s loose monetary policy, piling too much money into dollar-denominated assets leaves you exposed. Holding gold provides a hedge against dollar exposure, as its value will continue to rise as the value of the dollar falls.