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By Opalesque: In normal times, war, oil shocks, and market volatility would send gold prices soaring. Yet in recent weeks, gold has shed 14% of its value, while silver has fallen nearly twice as hard, dropping 28%. The apparent contradiction dissolves once you understand a key shift: gold is no longer behaving as a "fear asset." It is behaving as a reserve flow asset - and those flows are now reversing, according to Charles-Henry Monchau, CIO at Syz, a Swiss private banking group.
The Bull case that built the rally
Two structural forces drove precious metals higher for years. The first was monetary debasement. Since 2008, and accelerating through the pandemic, central banks expanded their balance sheets at an extraordinary pace. Real interest rates turned negative, inflation eventually arrived, and gold emerged as a natural hedge against the erosion of purchasing power.
The second force was de-dollarisation. When the US and Europe froze Russia's foreign reserves in 2022, surplus nations across the Global South and the Gulf drew a stark conclusion: dollar-denominated assets could be seized, but gold could not. Central banks - particularly in Saudi Arabia, the UAE, Kuwait, and Ch...................... To view our full article Click here
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