Gold is on fire at the moment.
The question for me comes back to government spending. We're clearly headed towards some kind of stagflationary environment where central banks are perpetually behind the curve.
I'm sure governments will ramp up spending on:
- Military
- Energy
- Green energy
- Infrastructure
But will it go beyond that to subsidies for consumers to buy energy, or covid-style supports. It certainly could and in any case, deficits will be out of control.
There's also going to be a decided shift in global reserves towards gold as it's effectively sanctions-proof (despite US efforts).
Gold touched $2062 but has quickly pulled back to $2042. The 2020 high was $2072. It's a technical trade now.