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The author is a prominent Russian journalist, part-time conservative politician, who coined the term "Russian Spring" during the 2014 anti-putsch movements in the Crimea and Donbass.The Russian President recently said patriotism is a Russian national ideal. But Russia is a country of paradoxes: pro-Western ideology has been a no less important but much more powerful ideology than patriotism. Westerners thought Russia didn't have the right to exist as an independent nation. Our only job was to self-destruct by dissolving into the West.
First, let's look at the improved fundamentals. Gold bugs will exasperatingly proclaim that fundamentals have been great for the past four years yet the price plunged anyway, so who cares about fundamentals? To this I would respond with two observations. First, large institutional investors and sovereign wealth funds have been anticipating a rate hike cycle for a very long time now. They didn't know when, but they expected it. The fact that the gold bugs never believed this is irrelevant; what matters is that big money believed it, and it was perceived to be very gold negative. In their minds, this anticipated rate hike cycle would confirm that things were getting back to normal, and if things are normal you don't need to own gold, right?- From the February 3, 2016 post: GOLD - It's Time to Pay Attention
The problem is that this assumption is quickly being called into question. Sure the Fed hiked rates once, but it is starting to look more and more like a policy error. Meanwhile, other major central banks around the world are going in the opposite direction, toward negative rates. I am a huge believer in market psychology, and the psychology dominating the minds of most institutional investors over the past few years has been that things were slowly getting back to normal. This has weighed on institutional demand for gold in a big way, and been a meaningful factor in the bear market (manipulation aside). If this psychology shifts, the shift back into gold could be very meaningful.
While that backdrop is interesting in its own right, what may make the move into gold that much more explosive is the lack of alternative investments...
Comment: The cops don't want drugs out of the prisons, not when there's good money to be made.