Gold in Flux as Traders Assess Latest Setbacks in US-Iran Talks

追加: 2026-05-11

[00:00:00]Yes. The demand has been good out of China.

[00:00:02]What we what we call the Shanghai Gold Exchange premium.

[00:00:05]That is the difference between the domestic price in China.

[00:00:09]And the global price is around $20, indicating strong domestic demand in China, which is mostly on the on the institutional side.

[00:00:20]It's interesting. It's less on jewelry and, uh, coins and small bars, which we have seen traditionally and more on the large bars, more for institutions because we had, uh, some regulatory reform in both China and India. Now at the top insurance companies in China are allowed to accumulate bullion, and asset managers in India are allowed to accumulate it as well. Uh, but in addition to that, we saw surprisingly strong buying in the latest data from the central bank, from the people's Bank of China, who bought 8.1 tonnes in the last, uh, for the last month's data. We had gold peak around $5,400 an ounce back in late January, early February. We've knocked down about 13% to where we are today. What did that peak tell you and and what did this 13% pullback tell you? Well I think the run up was a little robust okay. And that we did we were bringing in a lot of money that had not been in the market for quite some time or had not traded gold at all. So one could argue that the market had become overly long. Particularly when you look at CFTC data and other things we we have available now.

[00:01:32]There's been a lot of critics of the bullion market saying that the decline since the strikes on Iran and escalating oil prices, uh, that, that that gold is not a safe haven, uh, that it's, uh, a failed in some sense, but I would argue exactly the opposite, because as the oil went up and we got restocked, inflationary fears and bond yields rose and the dollar rose, equities declined.

[00:01:57]And in that atmosphere, uh, ready cash was needed.

[00:02:02]And that's what God provides you. So we saw.

[00:02:04]We did see liquidation in the gold market, but mostly as a reaction to the to to the financial market and is in a sense gold was an insurance policy and that insurance policy was being cashed in.

[00:02:16]Historically, what is the relationship, if any, gold to crude oil globally?

[00:02:23]Well, that's interesting because I'm old enough to remember when it was a positive relationship. And we've done some work on this.

[00:02:29]And the 1970s gold was, uh, positively correlated, uh, with oil.

[00:02:35]Oil ran up and so did, uh, gold in the 1980s.

[00:02:38]That was the same oil ran oil, uh, oil fell and and gold also fell.

[00:02:44]Now, that correlation seemed to break apart as we got into the 90s, as oil was a less significant part of the global economy.

[00:02:52]Okay. And that correlation is now only about 0.15 or even negative at times. It's negative at the moment.

[00:02:59]I look at where we are and everybody's talking about alternatives like Paul.

[00:03:06]There's 6040. Remember them?

[00:03:08]I got an A on that in the text. There you go.

[00:03:10]And then maybe there's 70. 2010.

[00:03:13]Yeah. Or 5032.

[00:03:15]And whatever is golden alternative asset.

[00:03:19]Or is it just unique and separate by itself?

[00:03:22]Well, I think you could argue that it is an alternative asset is certainly quite unique in the sense that it's a hard asset and it's also, uh, highly liquid.

[00:03:31]It doesn't correlate to Apple or Nvidia. No, it tends not to, you know, over the long run it way. It does not.

[00:03:38]I mean, things like Canadian farmland, for instance there.

[00:03:41]That's also a hard asset. But you can't liquidate it quickly.

[00:03:44]And that's the beauty of gold. It's both a hard asset.

[00:03:47]And it's it's highly liquid highly highly traded.

[00:03:51]But what you have touched on, Tom and I think we're seeing more and more of or we will see it back again is many asset managers who never before have included gold in their portfolio, are beginning to do that because they're looking for alternatives.