Gold Market Wire
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Gold Drifts Lower in Lackluster Trade
April 2, 2020 - (Gold Market Wire) - Gold is drifting lower out of the Far East, and remains in a lackluster mood. A small move towards support is outlined here:
$1576 is a small challenge for Gold this morning, but the market is merely drifting. The brave can try and short premium near the money.
On the more broad analysis side it is worth noting that the CoronaVirus situation should be considered anything but inflationary. in truth its deflationary impact is likely to be extreme. Velocity of money has ground to a halt and unless the 'authroities' force banks to lendinto the economy and people are actually allowed back into the economy, and not stuck at home, it is hard to see any outcome other than a massive depression. In an effort to once again "stimutle" the economy, which will act like an electric shock to a corpse, endless streams of liquidity will be unleashed - to go where, exactly, is anyone's guess.
Gold, if it is not made outright illegal, will provide a refuge of sorts. Honestly, there seems to be few, if any, stores of value left. Property has already been decimated and the mortgage market is D.O.A. The stock market is on its knees and bonds yield zero. It's not a great investment market, but the money has to go somewhere. Where will it go? Eventually back to equities, but Gold will also be a safe haven. It has already proved that in the past six weeks. Yes, it is off its high, but Gold is down only 7% from that point, where stocks have been levelled. When the "Grand Reset" commences and currency valuedrille to try and inspire inflation, what will they fall against? Probably the staple commodity sector (agriculture), which Gold will like. Right now, Gold is hanging tough. Which is exactly what it is supposed to do.
In a world confronted with mass unemployment, Gold is still doing its job.