Some of it is an artifact of the dollar’s weakness. The dollar has come off some 8% versus the trade-weighted basket in the last three months, as the US economy’s lingering weakness is making Europe look more attractive from a growth perspective.
They’ve done so much better at controlling the spread of Covid, that they are being rewarded with more economic activity.
Since global buyers of gold buy it in their local currency, and those local currencies are appreciating on average versus the dollar, the dollar-priced ounce of gold is rising.
That’s part of it, but not all of it. There is also the doubts of some investors that the debt-fuelled binge in the US is sustainable over the long haul. Deficits have accelerated so rapidly in the recent period that some people simply want less exposure to the dollar, and gold - illiquid and thinly traded and cumbersome to store - still looks like a good hedge.
YEARS ago when I had just become a gold bug, I read a prescient comment that "Gold is the thermometer which measures the temperature of the nation's economy".
The liberals were screaming about people who made gold their god. One guy replied, "If that is true, then this god is worshiped throughout the world, has no temples in its honor, and doesn't have one hypocrite in the congregation."
[Sidebar] I became a gold bug after reading Harry Briwn's "How you can profit from the coming devaluation". Ironically, I was reading it in a State Park camping ground on sunmmer holiday when Nixon broke the link and freed gold. I pist and moaned the whole vacation, thinking I was too late. I wasn't, and made out like a bandit later on.