RE:I can’t see them keeping this up for along time…
The backdrop of Covid disruption and effect on the world economy is such a big deal for the price of gold, thus the Amigoes, who will always be valued with some correlation to the junior gold indexes unless there are really phenomenal shallow grades and ounces added.
A late ‘70’s style stagflation with inflation getting under the price of gold, but growth dragging due to structural problems (shortages, supply chain disruptions, labor market unrest or dislocations) might be coming. Let’s say the continuing tightening of the screws on vaccination laggards pushes vaccinations up to a critical immunity level, and the developed world pushes vaccination into the 7ndeveloped world as well (now that production is gearing up, it is cheap medicine for global interests) ... getting ahead of variants ... the pandemic can peter out with as steep a down curve as the upcurve we saw. Suddenly it will just not be a story any more. Could it linger on and on for years? I doubt it. The majority of people who have been vaccinated are getting more militant by the day, and why shouldn’t they? I like Delta Airlines message to its employees ... we won’t mandate vaccination for all employee positions, but as of October 1 you can add $200/mo to your health care plan premium if you aren’t vaccinated. There is no reason the lower-risk vaccinated should underwrite the financial risks of the non vaccinated, and the actuaries can tell you those risks are real and significant because of the long-term hospital treatment required by unvaccinated Covid patients. So I believe there will be a tippng Point com8ng, and by then inflation will have gained quite a foothold after such aggressive and coordinated liquidity, easy money policiesvacross so many major economies.
Gold starts to run on the back of ultra-low to negative net real rates ... the leverage of KK’s give me a dollar I’ll get you an ounce of reserves starts to propel stock value. You just need to wait for it. Then this monkey-business, slow market, hedged, pro-shorting grind on trading prices get swept away very quickly. Right now, slow market, just accumulate if you have a long term thesis about higher gold prices. If not, maybe liquidate and get out of the market because for sure there are also broad market downside risks like taper tantrums, black swan shocks, who knows.
I’m in on the come line as they say at the craps table. Roll dem bones!
cg