Regal Assets Analytics

Tuesday, April 16, 2024

    The Underlying Driver Of Gold Is Debt

    Sharp upticks in gold off of news like coronavirus and the Iran assisination may be ultimately harmful to gold investors, said Brien Lundin in a discussion with Kitco News in January at the Metal Investor Conference.

    Lundin runs the Gold Newsletter and also hosts the New Orleans Investment Conference. At the start of January, gold spiked to a multi-year high after Iran bombed U.S. military bases in Iraq in retaliation for the assasination of Qassem Soleimani.

    “When the missiles flew, it had the effect of temporarily derailing the gold rally because people got confused. They think gold was moving for these geopolitical reasons,” said Lundin.

    Lundin notes that after these events pass gold usually heads back down.

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    “You can’t predict these things. You can’t trade them, and its not anything that will support a long-term consistent gold-bull market.”

    Lundin believes the underlying driver of gold is debt, which weakens the stability of fiat currency.

    “The big issue to me is the debt. The debt is so large we can’t approach anything like normalized interest rates.”


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