Gold Is On The Move, Again

Gold is currently trading at around $1,620 today after testing recent highs of $1,675 and lows of $1,460 all in a few weeks in March! Gold initially lost about 15% during this COVID-19 induced financial crisis over the past couple of weeks but has started to gain much of this back. We've seen this before and there are good reasons why.

The initial drop, and perhaps perceived underperformance, has disappointed many gold bulls and questioned the notion of its safe haven status. The pundits who have been banging the drum that the markets will crash were right but for the wrong reasons – the market collapse is a black swan event, more like a terrorist attack but not systemic. But they also suggested gold will rise out of the ashes of any financial nuclear winter and provide holders of gold massive returns with prices expected to reach $2,000. $3,000 or $10,000 per ounce. So, with gold not off to the races, what is happening?

Source: tradingview.com

Gold, while initially dropping by 15%, did its job as a portfolio stabilizer. All other asset categories such as currencies, oil, copper, equities etc, all got pounded. Those who have followed my posts will…