Money serves as a store of value especially during uncertain times. Gold can also serve as a store of value especially when money is being cheapened. A combination of zero interest rates, risks with yield chasing, and central bank balance sheet explosions has created a good gold environment. Demand as jewelry has fallen significantly, but ETF demand has soared.
Cash versus gold is not an either-or choice. Just a small exposure to gold across a wide investor base can prices rising. The declines in financial stress, volatility and policy uncertainty during April coupled with some expected relaxing with lockdowns may soften gold demand, but the financial environment will continue to look attractive.
Global monetary experiments create cash value uncertainty and demand for store of value diversification.
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