At all-time highs in six of the world’s top currencies
The charts posted immediately below tell one of the quiet, but perhaps most important stories unfolding in the world of high international finance. Gold has appreciated sharply in the currencies of all of the world’s top economies. In five of the top eight economies – the United Kingdom, Japan, Canada, Australia, and India – it is priced at all-time highs. In short, as currencies race for the bottom, gold is racing to the top. Investors everywhere are moving to insulate their portfolios against the combined threats of recession, plummeting yields, currency depreciation, and stock market instability. An over-arching nemesis not likely to relinquish its place any time soon has unleashed those four horsemen – the burgeoning trade and currency war.
Gold is up 25% in sterling; 22% in the yuan; 21.5% in euros; 19.7% in Australian dollars; 18% in rupee; 13% in Canadian dollars and 12% in Japanese yen. It is up sharply against a long list of emerging country currencies as well. By way of perspective, gold is up 16% in U.S. dollars thus far in 2019. “A host of global factors mean gold’s price is set to maintain its strength at least for the next six to 12 months,” said Howie Lee, an economist at Singapore’s Oversea-Chinese Banking Corporation, in a recent CNBC interview. “The world right now is in a precarious state and gold is due to benefit from this situation,” With the world – from Asia to Europe, the United States and a long list of emerging countries – now acutely attuned to gold ownership, it might not be long until we begin to see strains on the limited physical supplies.
Charts courtesy of TradingView.com
“The true hallmark of a bull market in gold, however, is its ability to rise relative to other major currencies. And it’s doing just that.” – John Murphy
