Silver skyrocketed this month as the market realized the world will demand much more industrial metal than miners can provide. And yet, silver remains far below its 2011 high.
Costco enthusiasts love the big box store for household goods and $1.50 hot dogs. But now, card-carrying members are flocking to the retailer for… Costco gold bars?
Typically, rising yields are bad for gold. Not this year. Rising yields represent an increasing risk of a public debt crisis, for which gold may be the only remedy.
Monetary tightening has created difficulties for the US and foreign governments in managing debt. As these issues persist, gold’s role as a hedge against monetary instability and geopolitical unrest becomes increasingly important.
The drastic increase in debt defaults show that rate hikes are starting to bite. The “free money” measures during COVID-19 seem to have delayed, not solved, the problem.
Assets and industries traditionally considered “safe havens” are rapidly losing their luster in our high interest rate environment. Precious metals could soon be the last bastion of safety.