GoldNuggets — Gold Drivers, Miners, GDP
China Gold
I noticed a couple of things last week: first the gold price in CNY made a new all-time high; second — the gold $Gold - main 2502(GCmain)$ price in China has been moving in lockstep with Chinese government bonds.
This stands in contrast to the breakdown in the US real yield vs gold price relationship, and gives further nod to the point that China/EM have been in the driver’s seat of the gold price (both in terms of the geopolitics and reserves diversification aspect, but also on the macro/markets side of things).
Gold vs TIPS
As noted, the past link between gold and TIPS real yields broke down in 2022. Warren Pies of 3Fourteen Research comments: “two broad conclusions: 1) Central banks driving the run, 2) This is secular bull market behavior.“
Of course, with the first chart you might argue gold still moves with the bond market, just a different bond market than in the past!
Gold Miners’ Deep Value
Brandon Beylo of Macro Ops Research remarks: ”Gold Equities are the cheapest they’ve been in over 40 years. Record gold prices, record cash flows. Who’s ready for the Golden Age?”
also re: Gold Miners, please see survey below…
Gold Market Cap to GDP Ratio
Last but not least, here’s an interesting chart from Econovis showing the path of the Global Gold Market capitalization to GDP ratio.
Market commentators often point to this ratio in reference to the stockmarket as a valuation indicator, some might conclude on that lens that the gold price is expensive/overvalued.
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