Investment demand for gold remains strong with inflows into the gold exchange traded funds at near record highs. A bright spot is gold has increased 5 percent this year versus a 20 percent collapse in S&P 500. Gold futures were also caught in a squeeze, forcing up physical demand, rivaled only by the scramble for toilet paper. Yet, gold has outperformed every asset class and in euros and yen, have already posted record highs.
We continue to target $2,200 before yearend, a target that has been much maligned and a target that few expect. A century ago money was a claim on gold. Today money is a claim on nothing, but the full faith and credit of the United States. Debt on debt is not good. We believe that the debasement of the dollar to rescue the US economy will result in rising inflation possibly hyperinflation, which will be good for gold, but bad for the dollar.
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