I continue to be intrigued by the disconnect between physical and paper gold. It’s a theme that just won’t go away. One of the things that is striking to me is that if you talk about anything that’s considered to be a rarity like vintage sports cars, wines, art diamonds, etc, they’ve just skyrocketed in price. And the front page story on that is money printing and unprecedented liquidity. I guess the most topical example of that is Bitcoins. In the last 2 years I think the price of a Bitcoin has gone from less than $25 to above $700.
Gold has the same characteristics. Gold is hard to find. It’s scarce. But gold’s price, if you take a 2 year period, it has fallen from $1,500 down to where we are today, which is about an 18% decline. Yet the same headlines would be applicable for gold. So the question people are asking is, ‘What is going on here?’
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