Gold Is 13% Overvalued — Why That’ll Soon Look Cheap

Highlights

  • Macro: Watch out for the next CPI print
  • Valuation: 13% dear
  • Flows: They are selling gold!
  • Technicals: Trend has cooled

MACRO

Gold back in line against copper

Source: Bloomberg

2013 to 2016 saw inflation grind to a halt

Source: Bloomberg

Fair value hit by real rate spike

Source: Bloomberg

Gold back to a premium

Source: Bloomberg

Inflation expectations drop to 2.4% per year (it was 1% per month last month)

Source: Bloomberg
Source: State Street

FLOWS

Investors sell gold

Source: Bloomberg

TECHNICALS

Gold without Dollars

Source: Bloomberg

Gold in Dollars

Source: Bloomberg

SUMMARY

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