Gold Is So Popular It's Making People Nervous

https://www.bloomberg.com/news/newsletters/2025-04-26/gold-is-so-popular-it-s-making-people-nervous-merryn-talks-money

by walterbell • 1 year ago

59 83 1 year ago

bloomberg.com

walterbell2• 1 year ago

https://archive.ph/59b0S

walterbell2• 1 year ago

BIS Basel III is scheduled for July 2025 in US, impacting paper vs physical gold.

HN ranking history for this thread, https://hnrankings.info/43809241/

bix6• 1 year ago

Worldwide decoupling from USD? Where do we go from here?

senectus1• 1 year ago

thats the questions isnt it?

Euro or Yuan is my guess.

I'm inclined to say the Euro over the Yuan, if the US collpases then China is bound to follow. Their debts are tightly bound up together.

ncallaway• 1 year ago

I think there's a option here: there could be no replacement. The fact of the world having a singular reserve currency is not guaranteed.

A totally possible outcome is nothing really replaces the dollar as the reserve currency, and international trade is just... less efficient because of it.

If the world moves away from the dollar, I think having a singular reserve currency replace it is probably the best case scenario

wqaatwt6• 1 year ago

China has pretty strict capital controls. Wouldn’t that more or less entirely disqualify Yuan?

drewcoo• 1 year ago

We go to BRICs.

carlosjobim• 1 year ago

Not even BRICS countries would trust BRICS. There dollar is horrible, every other currency is much worse.

pjc503• 1 year ago

A country sanctioned by half the world, a country with capital controls and non convertible currency, a country about to fight Pakistan, and whatever is going on with Brazil? That's not stability.

IAmBroom3• 1 year ago

I assume you dropped this: /s

klodolph2• 1 year ago

Diversification?

Taniwha• 1 year ago

Trade imbalances typically solve themselves because they force currency changes, if I have too many Y$ because I sell more to country Y than I buy then I can't use them easily and they become worth less, that means Y's exporters get more Y$ when they sell stuff and importers pay more - trade deficits balance out.

If you have a currency that's needed for something like buying a staple like oil from other than that country then that $$ is worth more, is artificially high, and that country will tend to always have trade deficits

It's very much a case of "you can't have your cake and eat it too" - it also means that Trump's tariffs are very much an incentive for the rest of the world to get off of the US oil $

YZF2• 1 year ago

There is no quick decoupling from the USD. Everyone holds long term USD instruments. Nobody wants to lose their money. The US is still the world's largest economy - by a lot.

Gold isn't that much more expensive than it was in e.g. 1980. It is pretty much just saying there's risk in other places at the moment and people are nervous. You should buy gold if your prediction is a complete collapse of economies along the lines of the great depression. I think this is extremely unlikely.

Short gold ;)

I've always wanted to get some physical gold just because it's so nice and shiny. But I'll wait for the price to go a little down. Maybe Costco selling gold bars is what's pushing up the price/demand?

olalonde4• 1 year ago

The US is still the world's largest economy - by a lot.

China is.

hiddencost• 1 year ago

Pretty sure that's over.

pjc503• 1 year ago

The gold sovereigns I bought in 2012 are doing just fine, and have some useful tax advantages. Very shiny and surprisingly small.

(UK people: do not buy as investment any gold which will require you to pay VAT!)

smaddox• 1 year ago

Gold/M2SL(Billion USD) is currently around 0.12. In 1980, it peaked around 0.45. Monthly average since 1960 is 0.11. In late 2011 it peaked around 0.18.

Gold / Global M2 would be a better metric, but I haven't analyzed that yet.

int_19h2• 1 year ago

If US economy collapses - and given the people who are now in charge, it doesn't feel all that unlikely anymore - this very economic dependency means that the crash will likely be global. On top of that, I think that it makes a major war that much more probable.

The nice thing about physical gold compared to just about everything else is that it has a non-zero bottom. You put money there not because you expect growth, but because you want to still be holding something once this is all over.

mayama• 1 year ago

Everyone holds long term USD instruments. Nobody wants to lose their money. The US is still the world's largest economy - by a lot.

Sure US share of world gdp is hovering around 25% for decades. But, world gdp share of what I would call US adjacent economies, like EU, JPN, UK etc., is decreasing with rise of chinese economy. US could comfortably run petrodollar and global reserve currency with the help of these adjacent economies by exporting US deficit, by forcing these adjacent economies to make concessions like plaza accords when running deficit dollar becomes tough.

China on the other hand is making moves to make maintaining deficit dollar impossible in long run, non-floating yuan, export dumping, belt road etc. We are running in to situation where deficit dollar and global economy decoupling could happen from both sides US and other countries. This is one way triffn dilemma could get resolved.

011000114• 1 year ago

After I got a divorce I was bored and melted down my wedding ring with a MAPP torch. Molten gold is simply beautiful. Liquid like mercury but shiny and glowing at the same time.

Anyway, ditto to everything you said. Fade the doomers who are calling for the collapse of the USD. There simply isn't an alternative. China won't give up the control as they would need to do to be the holder of the next reserve currency. The EU is a fractured joke of a union that can't be trusted to manage it either. The US continues to be the least bad option. We have deep markets to provide liquidity needed for the global economy. We still have, more or less, the rule of law and a system of checks and balances. The USD will eventually be replaced but it will likely take decades.

rapsey2• 1 year ago

Gold is being bought by central banks around the world massively. The biggest buyers are China and Russia. The US weaponized the dollar during the Ukraine invasion and countries have taken the decision to lower their exposure.

Gold is likely in a structural bull market. It thrives in times of uncertainty and the world is far from certain.

ben_w5• 1 year ago

It's the triangle thing: Quick, cheap, minimal side-effects, but you can pick at most two. There's loads of ways the world may do "quick" if we all find we have to, but it won't be good — and not just because of the various reasons why we might find we have to do it quick.

011000114• 1 year ago

Probably nowhere. Despite what crypto maximalists, Sino-apologists or Eurofetishists will have you believe, there is nothing like the USD in terms of function. That isn't to say that gold won't go higher in USD terms or that USD won't further weaken against some other currencies, but we are still decades away from the end of king dollar.

As bad of a president as trump is, he will not destroy America. Things have been bad before, and they got better. We will see better times again.

Edit: And, yes, central banks have as of late been increasing gold reserves. Expect some of those gold reserves to be liquidated in the event that those countries currencies need support. Gold can have amazing periods like we've just witnesses and then just sit there for ten years. It's good for diversification though and from what I've heard from smarter people than me, something like 10% of your portfolio in gold isn't a terrible idea. Just DCA into it instead of panic buying at a potential top.

Oh and this is HN. Most of us have no clue when it comes to economics and are merely parroting our favorite twitter guru or Peter Zeihan. Trust us when we talk about software but take everything you hear in these economic related threads with a huge grain of salt.

csomar2• 1 year ago

there is nothing like the USD in terms of function.

This might have been true 10 years ago but that's not the case today. I was in Chengdu last week and I paid at a store market with a TnG wallet using Malaysia MYR. Sure this is only South East Asia, but many countries now have their own ewallet thing and they can be ready in a short time to move.

ben_w5• 1 year ago

As bad of a president as trump is, he will not destroy America. Things have been bad before, and they got better. We will see better times again.

You sure about that? Lincoln almost managed it just by getting elected, given secession happened between election and inauguration.

I can't tell how bad Trump really is. If he's what he looks like, then he's purging anyone who won't butter up his ego. With that in mind: What would have happened if nobody had been willing to tell him it was a bad idea to open the northern California dams to solve the fire in Los Angeles, and they'd all been drained?

6stringmerc• 1 year ago

Markets are completely erratic at this point - everything points to frayed nerves. GDP numbers incoming. Gold a traditional safe haven but let’s be honest, people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself. Total chaos and I’m here for it. Self imposed pending collapse is breeding black swans that have yet to hatch. Source: worked at an investment bank during 2008 collapse.

YZF2• 1 year ago

Seems like the market is thinking this is man made so can be man fixed. Not the same systemic issues as we had with debt during 2008. Many businesses seems to be pretty healthy. AI still has ways to run in its bubble cycle- still huge investments into this space.

Really hard to predict. Confidence has eroded but emotions can switch very quickly to fear of missing the next rally.

Maybe a more fundamental question is what multiples are the new normal and where are interest rates going.

pengaru• 1 year ago

people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself.

Says you. A month ago I was trying to buy 1oz bars as gifts for my niece and nephew, from Costco of all places. They were often sold out by noon, sometimes queues for the stuff.

I wasn't even trying to buy something that was going to appreciate in value quickly, it's already gone up >10% from the Costco price at the time.

USD seems doomed right now, through the lens of the price of gold in USD.

SpicyLemonZest2• 1 year ago

let’s be honest, people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself.

Is there data or is this speculation? After the Gamestop saga, I would 100% believe that the gold market is being driven by a liquidity crunch as lots of random individuals buy gold bars to stuff in their sock drawers.

thelastgallon• 1 year ago

people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself.

So, Gold NFTs?

IAmGraydon• 1 year ago

If you're thinking about buying gold, I would advise you to exercise caution. There have been a number of high profile articles like this one in the last week or so, and several of them came from people who stand to profit from you buying gold. As an example, this is one from Peter Schiff that came out Friday:

https://investorsobserver.com/news/3500-gold-means-life-in-a...

It turns out Peter Schiff owns SchiffGold, a large gold dealer. This guy is saying we all need to own gold due to economic turmoil, and then turns around and sells it by the ton.

Also, it's worth taking a look at the Gold/USD since 1970 on a log chart. The rate of increase we're seeing right now is not at all unusual, and it has gone through periods of much faster growth. From 1970-1980, it increased 3000% in only 10 years.

It's also worth noting that gold fell sharply in the days following the tariff announcements (6.66%, oddly enough) and then took off. The immediate reaction to economic news is typically smart money because they can estimate the longer term impact faster and price it in. The delayed reaction usually comes from dumb money.

Something just feels very off about this to me.

pjc503• 1 year ago

There's a long tradition of people talking up doom so they can market supplies to preppers. If those people get anywhere near power they will create the doom so they can fulfill their marketing.

On the other hand, as the Economist said, there's another 1300 days of this.

jen729w• 1 year ago

Well there's that, but also here's a ten-year graph of GOLD.AX.

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ArtTimeInvestor5• 1 year ago

Gold is cumbersome to handle and prone to inflation as more and more is mined. Just one example that recently caught my attention: Germany is currently discussing how to get back the part of their Gold reserves they have stored inside the USA. It is a pretty hard task. And afterwards it would be hard to use that Gold as a means of exchange, as it would have to be physically shipped around the world.

Bitcoin seems to solve all the problems the Dollar and Gold have as a reserve currency. It is independent of trade deficits, can be stored and transferred easily. Cannot be printed away.

What alternative future is there to Bitcoin becoming the new reserve currency?

rafram• 1 year ago

What alternative future is there to Bitcoin becoming the new reserve currency?

Bitcoin not becoming the new reserve currency.

zeroonetwothree• 1 year ago

Bitcoin has too much volatility right now. Maybe that will change one day.

lordofgibbons• 1 year ago

1) > Cannot be printed away.

Why would any government want this a feature? As far as sovereigns are concerned, this is a bug, not a feature. You and I might or might not agree with it, but no sovereign government would give away its ability to print money.

2) Bitcoin has a public and transparent ledger. Why would any government want the whole world to see their reserve amounts and movements in real time?

johnny22• 1 year ago

Why would any government want this a feature?

I'm not a sovereign and I don't want this feature either.

ArtTimeInvestor5• 1 year ago

    no sovereign government would give
    away its ability to print money

Germany can print Dollars?

cwalv2• 1 year ago

Why would any government want this a feature?

As an issuer, they wouldn't. But nobody can issue Bitcoin anyway, so that's clearly irrelevant.

As a reserve, it would be the same ones who buy gold, for the same reason.

SpicyLemonZest2• 1 year ago

That's not what "reserve currency" means. A reserve currency is a currency which a country reasonably expects will be widely accepted in international trade, even in an economic crisis where other countries may not trust its own currency.

wqaatwt6• 1 year ago

Bitcoin is ridiculously unsuitable and horrible as a currency, calling it that at this point is silly.

Also extreme price volatility make it not a great reserve asset.

cwalv2• 1 year ago

I agree that on intrinsic characteristics, it makes more sense than gold. But most people do not even think about what 'money' is, and as with anything there's a lot of inertia in established practices. Esp. when a key aspect of money is salability, any alternative has a very steep hill to climb.

Gradually, then suddenly

csomar2• 1 year ago

Bitcoin is held in a ledger and need to be mined constantly. I do like Bitcoin but it is not comparable to Gold which is an offline asset.

charcircuit• 1 year ago

It doesn't need to be mined constantly. In theory people could propose new blocks that don't create any new coins.

praptak3• 1 year ago

Nobody has enough certainty that Bitcoin is resilient against a determined state actor in case of war.

ArtTimeInvestor5• 1 year ago

What type of attack do you envision?

Say country A trades goods with country B and they pay each other in Bitcoin.

Now what could country C do about it?

Gold Is So Popular It's Making People Nervous

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