An interesting change is occurring from a macro perspective over the prior two years. As US government deficits continue to expand Gold and treasuries have diverged significantly. This is not a subtle change given that treasuries have been considered “pristine collateral” used to underwrite the financial system (Bretton Woods, 1944).
Today, Gold looks to be replacing treasuries as collateral with benign foreign demand for US government debt.
Over the past year miners have also diverged significantly from the underlying commodity prompting the CEO of Newmont to call this a 'Once-in-a-generation buy' during an interview on Bloomberg back in late February.
Contents:
Are we moving into a Golden era for Gold?
Further support for a momentum breakout in the Gold price
Napkin math
The capital allocation strategy is quite simple
Assets & Debt maturities
Final Thoughts
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