The rise in gold prices to $1750 an ounce, as I write, makes impeccable macroeconomic sense. After all, the Federal Reserve has increased its balance sheet by 65% since March alone, a policy response to the pandemic echoed by all the world’s chief central banks. Governments around the world have enacted epic levels of stimulus, even at the cost of budgetary prudence. This combination of money supply expansion, fiscal stimulus and rising government debt is bullish for gold, especially at a time when real interest rates in most of the world’s major economies are negative, which has slashed the opportunity cost of allocating to gold in global multi-asset portfolio.
What next for gold prices?
The Macro View
