1/ Let us share some fundamentals on #gold price, given latest price action has been testing nerves of bulls after 50% increase post 2018.

Thread @Mintgecko @TheLastDegree @GMoneyResearch @AdamMancini4

2/ View gold as a currency

3/ Like other currencies, #gold prices are volatile despite safe heaven backdrop...

4/ #gold is third most liquid asset class behind #UST and #SPX. It is entertaining, at times visionary, to read #bitcoin takes away sun of #gold. In reality, that is technically impossible. The two asset classes do not compete. @michael_saylor

5/ No surprise: analysts also here follow price action when “forecasting”. Boringly useless. #WallStreet

6/ In contrast to consumable commodities such as #oil #gas or #copper, #gold does not trade off supply/demand fundamentals. Please study @IGWTreport reports if u want to learn more...! @RonStoeferle

7/ After adjusting for Bretton Woods effect 1971-1975, first free floating bull market til 1980 shows good correlation bw price and real yields, except for a brief period of gold price euphoria. By the by, historic bull markets usually perform >600%...

9/ So basically #gold price trade of TIPS since 1975 (we only have TIPS ETF data since 2003 with R square > 0.7!). Hence, to understand gold price, one needs to have a view on direction of nominal 10y UST and inflation. We will share a view here in a separate thread.

10/ We often read a weaker dollar is good for gold and vice versa. This may be true short term. However, since 1970 there is zero correlation between the two! #USD #Dollar

11/ Of course, gold performance needs local context. If u are based in Brazil or Russia, each with high natural inflation due to dollar bull for past decades, u only had a bull market in #gold :-)

12/ #gold demand is >65% retail (jewellery, coins, bars), 17% central banks, some industrial use and gold backed ETFs.

13/ ETFs explain marginal buyer in #gold best, not #Centralbanks. So for all the conspiracies about #DeepStateCorruption, ETF inflows or outflows matter. ETFs react to TIPS! @EdVanDerWalt does great work following them.

14/ Speculative Futures position do NOT explain #gold price action. Simply does not move the needle. Too big an asset class.

End of thread. Cheers. Pls share!

Thx