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| Gold bars are presented at the German Central Bank in Frankfurt am Main, central Germany on August 23, 2017. The Bundesbank, the German central bank, announced that it has completed the repatriation of all its gold reserves still stocked in Paris and part of those in the United States. / AFP PHOTO / dpa / Arne Dedert / Germany OUT (Photo credit should read ARNE DEDERT/DPA/AFP via Getty Images) |
For years, gold bugs were relegated to the fringes of financial markets. Often viewed by mainstream investors as tinfoil-hat conspiracists with basements full of beans and bottled water, their warnings sounded apocalyptic: a coming collapse in financial assets, widespread devaluation of paper money and global disasters that erode civil liberties.
Welcome to 2020.
As the coronavirus brings economies around the world to a standstill, gold is rivaling Treasuries and the dollar as the best-performing major asset this year. The metal proved its haven status with a 6% rally as almost $16 trillion was wiped off global stock markets and oil plunged.
There’s also been a scramble for physical metal as investors in exchange-traded funds build the biggest stockpile in history and dealers say they’re struggling to find gold to sell.
“We’ve been trying to warn people that something like this would happen,” said Jim Rickards, the author of several books that predicted a coming financial reset. Rickards, who spoke from a New England mountain compound, has long recommended holding gold as a precaution for wealth preservation.
“I’ve been saying it for years,” he said. “I’m not happy about being right.”
There’s echoes of many of the typical gold bug predictions in today’s crisis. Besides the obvious economic and financial-market upheaval, social interaction has become taboo and in some places soldiers are telling people not to leave their homes.
Source: Eddie van der Walt, Ranjeetha Pakiam, and Jan-Patrick Barnert | Bloomberg
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