Why haven't gold prices kept up with other commodity prices (Coal, Copper, etc.)?
Is this bound to happen once inflation becomes more of a sure thing?
Why haven't gold prices kept up with other commodity prices (Coal, Copper, etc.)?
- Last Updated:
- Jul 15th, 2021 3:41 pm
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- redflagdealsnewb [OP]
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- Jun 10, 2015
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3 replies
- favelle75
- Deal Addict
- Jan 3, 2013
- 2718 posts
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- Sidney
Maybe gold is less "useful" as a commodity?redflagdealsnewb wrote: ↑ Is this bound to happen once inflation becomes more of a sure thing?
- xgbsSS
- Deal Fanatic
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- May 11, 2014
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- Rankin Inlet, NU
Some of the old gold bugs have switched to Bitcoin
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- DealRNothing
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- Jul 30, 2012
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redflagdealsnewb wrote: ↑Is this bound to happen once inflation becomes more of a sure thing?
For the last year (minimum), Gold is behaving much more as a Currency proxy verses Inflation expectations (aka Bitcoin). If you can stomach the volatility, Bitcoin (so far) has proven to be the "best" proxy on inflation. Counter to that, however, it is also a proxy (massively so) for "deflation" expectations.
The UST10Y peaked in May at 1.7% (short-term moves) along with $BCHUSD (Bitcoin "Cash") at $1,700 US. While buying Bitcoin a year ago would have made one look brilliant (against Gold), not so much in the last 3 months. Current price ($BCHUSD) is $450 (a drop of 75%). Additionally, the UST10Y is down over 20%, while Gold (Spot) is down about 4%.
I would tend to (and do) look at Gold equities as an upmarket play on Bonds with dividend yields on the Gold majors. If you look at (Gold &) Gold stocks in that context you can correlate and justify expectations against anemic bond yields.