A far more relevant question is: if gold is the safe haven ect.... then why is the gold price going nowhere in such uncertain times presented by the pandemic and support programmes rolled out by governments.
That is a more relevant question. If Doc was dreaming of ridiculous figures north of $2000, Doc would be very worried by the insipid gold price response to a once in 100 years event (100yr used for illustrative purpose).
It matters not a lot. Doc knows where the gold price is heading, or more to the point where it will be trading, and that is not north of $1900 with a greater than 75% chance of it falling to the lower band of 1360.
Reason 1 ? Liquidity in the system will underpin a rapid return to profits for companies that have been mothballed due to the virus.
Reason 2? Funds and professional traders are not going to pay exorbitant prices for gold the commodity knowing they would line the pockets of miners.
The only scenario that would derail a stock market surpassing previous highs in the short term is a secondary outbreak. If that was to occur all bets are off, including gold.
Don't be fooled by unemployment and the obvious shortfall in GDP. That is a temporary event not systemic - people will return to work and unemployment will rapidly decline. People going back to work will set a rocket under the market. New highs in stock markets this year on the proviso there is no secondary outbreak. Do not be bamboozled by sovereign debt, it bears no resemblance to personal or company debt - two completely different concepts. Gold price will regress to its long term mean around 1360.
