Major market divergences——
Figure 1: Historically high gold prices (yellow line) VS continued upward US real interest rates (red line).
Figure 2: S&P 500 at high point (green line) VS balance sheet size of major central banks (blue line) We can review the changes in gold market pricing in 2023——the return of monetary attributes. After the Russian-Ukrainian conflict, the correlation between gold and the real interest rate of the US dollar has been greatly weakened. The story of de-dollarization began to ferment, and central banks of various countries began to pursue the diversification of foreign exchange reserves and increase their holdings of gold and BTC. The logic of long-term inflation began to be questioned, and the model of debt + economic growth was tested.
The increase in divergences and deviations only points to one reason——US Treasury bonds are gradually losing the role of global asset pricing anchors, and people need more interest-free inflation-protected bonds that transcend national sovereign credit. In this round of global interest rate cuts, gold and BTC are two major safe-haven assets that must be configured. Continue the buy and hold strategy!
