The perception of the gold market has changed radically since the Great Financial Crisis (GFC). During the first 10 years of the century, central banks sold gold. Who wants gold when you can have dollars, euros, or yen? Who wants a real asset with no yield when you can have a financial asset with a yield? Who wants a real asset when inflation was under control and less than 2%?
Now, we know who wants these assets - central banks. These institutions create fiat money, and they don't want it from their peers. Of course, rates were set to zero and, in many cases, moved to negative values during the period of QE. If financial assets can yield negative returns, a hard asset with zero yield looks pretty good. If government debt reaches a new high well beyond GDP, we can suspect it will not be paid with taxes, and governments will have to default on the debt or inflate their economies. The pandemic suggested that governments will go to any lengths to boost the economy with new money.
The central banks are acting rationally and not telling the public what they really think. Fiat money is out, and hard assets are in.
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