Cometh the hour, cometh gold

Kit Winder | 9 July 2020 Hidden beneath the gold Dear Reader,   Goldbugs are sometimes figures of scorn to the mainstream press, but even the Financial Times is talking about gold in a positive light:   “Some of the world’s largest hedge funds are raising their bets on gold, forecasting that central banks’ unprecedented responses to the coronavirus crisis will lead to devaluations of major currencies.”   And the proof is there: gold continues to rise. It’s now up over 17% since the start of the year, even factoring in the crash in March. Its outperformed the NASDAQ – the top stock index in America.    Last month, Gold hit a seven year high. It’s recently made an all-time high in pounds.  Past performance is not a reliable indicator of future results   So what does this tell us?   With gold being the ‘crisis asset’… it tells us that investors, despite stocks rebounding, are still cautious at best. At worst, they’re nervous and jumpy.   And that goes for the hedge funds, too, if the FT is correct.   What are they nervous about?   A second wave, of course, and the potential crash that could come with it. But there’s something more here.   Something deeper than just another COVID correction; something that another COVID correction could cause.   Something that might look like this.   All the best,   Kit Winder Editor, Southbank Investment Research

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