Deutsche Bank with a brief note on gold:
- investors are pricing in larger rate cuts for 2024 has increased the relative appeal of something that does not pay any interest
- chart shows the real price of Gold back to 1790, i.e. adjusting for inflation
- Although we have hit all time highs in nominal terms, we are over 20% below the inflation-adjusted peak seen in 1980.
- Although gold might seem like it’s a good inflation hedge, it only keeps pace with inflation if you buy it at the correct time. In reality, it trails traditional assets over almost all medium to long-term time periods.
- So you can be a long-run inflationist but still be a bit underwhelmed by Gold as an investment. Maybe Bitcoin has diluted its allure but that’s a story for another day.
