OF THE
TIMES
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...
"The price tag for replacing the lead pipes that contaminated its drinking water, thanks to the corrosive toxins found in the Flint River, is now estimated at up to $1.5 billion. No one knows where that money will come from or when it will arrive. In the meantime, the cost to the children of Flint has been and will be incalculable."I sit with these words: "No one knows where the money will come from."
Comment: This same sexist and women-denigrating culture can, unfortunately, be seen throughout the world. And in this respect, Iran is certainly not unique - and some other countries most probably far worse:
Ex-Air Force lawyer: Victims of rape in the military face revenge, backlash from superiors for coming forward