What Massive Increase In Monetary Expansion Means For Gold & Gold Mining Stocks

Source: Federal Reserve

Note: Data up to the week ended 22 May 2020. Source: World Gold Council

…[While] this writer would advise investors to purchase gold only via bullion or gold mining stocks, it is a practical reality that in a world of convenience shopping most will do so via paper gold ETFs. This is why gold ETF holdings need to be monitored closely…

In the short-term, inflation data will decline dramatically, potentially into outright deflation, as a result of the lockdowns and, if inflation turns negative on a Y-o-Y basis, the monetary theorists will argue for negative rates because real rates are rising but, hopefully, the insanity of negative interest rates will be avoided in America but, if not, that would be yet another bullish catalyst for gold…

Editor’s Note:  The original article by Christopher Wood has been edited ([ ]) and abridged (…) above for the sake of clarity and brevity to ensure a fast and easy read.  The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.  Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

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