War, inflation, uncertainty, negative real rates, and overall uncertainty. If this is not the perfect conditions for holding gold, I don't know of any better. The price activity was morbid for the last year given the inflationary economic environment, but the market has moved from 1800 to 2040 in the last month.
Flows have not matched 2020 levels for the first two months of the year, yet it would be a clique to say that gold has lost its luster. We are still early in this geopolitical event. Looking at monthly changes since 1970 from the Gold Hub database, the month of March so far is in the 89th percentile and last month was in the 88th percentile, so the gold moves this year are significant.
Gold is outside money and is not a liability for anyone in the global economy. This is a significant characteristic that has been under discussed although we may be finding out that if you cannot sell gold in large quantities, it may not have the level of safety desired in a crisis; ask the Russian central bank. Still, the safety of gold is being resurrected and investors should take note.
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