3 Key Takeaways from the WSJ’s Recent Gold Video

Earlier this week, the Wall Street Journal released a bullish gold video, exploring its recent run-up to $2400/oz and the underlying causes. This-in and of itself-is remarkable. Historically, gold has garnered little attention from the mainstream media. However, as 2024 unfolds, that seems to be changing. And, as the video hints, a broader base of investors are taking an interest in gold. Here are our takeaways...

Gold's Rising Despite What Conventional Wisdom Might Tell Us

By now, you probably know that gold prices have been climbing month after month, hitting all-time high after all-time high.  Part of the reason more and more news outlets are reporting on this is because the current economy does not look how many would expect it to look in an environment of rising gold prices.  While the WSJ touches on this, economist David Rosenberg explains it succinctly: 

“The rise in the gold price has come at a time of dollar strength, falling inflation expectations, and during which the Fed has moved market expectations toward a ‘higher for longer’ conviction. All those developments would typically hurt the gold price, but it’s forged ahead regardless.”

Of course, we'd be remiss if we did not point out that this summary ignores two important facts.  1) Gold and debt have a long history of rising in tandem and 2) our national debt has surpassed $34 trillion with the cost of servicing that debt spiraling out of control.  This alone makes a strong case for soaring gold prices.  But we digress...

Gold Sentiment Is Shifting

The WSJ video uncovers some other interesting nuggets.  First, recent demand is not just fueled by central banks, but also investors-many of them young and buying in small quantities they can afford.  Apparently skepticism "of traditional financial assets" is also on the rise according to reporter Bob Henderson who adds that "there's no CEO of gold-nobody can manipulate it".

And the evidence is not just anecdotal.  A 2023 Gallup Study uncovered that Americans prefer gold to stocks as a long-term investment!  

The Recent Rally Isn't Just a Flash in the Pan

Many analysts expect the upward gold trend to continue.  Fresh out of a global pandemic with new aggressions in the Middle East and Ukraine, investors are viewing the world through a new lens and finding reassurance in the tangibility and reliability of gold.  Henderson summed it up well when he said:

"The underlying things that are causing worry and driving people to gold-those don't seem to be going away any time soon."