{"text":[[{"start":4.38,"text":"Gold is a beguiling asset. With only a few industrial uses, its value is largely anchored only by our collective perceptions of its worth. These collective perceptions used to move pretty much in line with the inverse of the real yield on a US Treasury Inflation-Protected Security."}],[{"start":20.46,"text":"This sort of made sense if you conceive of gold and TIPS as portal assets: assets that allow you to preserve the purchasing power of your money through time and monetary regimes (absent any regime shift that knocked out the US dollar or the US government’s ability/willingness to honour its debts in the case of TIPS). Real yields go up? The present value of that shiny zero-coupon rock’s promised purchasing power falls. Real yields fall? Gold prices to the moon."}],[{"start":48.32,"text":"Then Russia invaded Ukraine:"}],[{"start":null,"text":"
"}],[{"start":50.44,"text":"While blowing the relationships to absolute smithereens, the price schism actually made sense under the portal asset view of the world. Because if the people wanting to pop their wealth into a portal that preserves their purchasing power happen to be the same sort of people on whom the US government might impose financial sanctions, the TIPS portal looks a dud."}],[{"start":69.1,"text":"And since this fork in the road, speculation aplenty has come and gone as to whether the massive rally was all due to central bank purchases, sovereign wealth funds, China, Tether, or maybe preppers. Who can really tell? Obviously not us."}],[{"start":82.88,"text":"But if the gold-as-a-portal-asset view ever had legs, shouldn’t it reassert itself once some one-time price-level step change was over?"}],[{"start":90.72,"text":"While never condoning torture, the following dual y-axes chart suggests ‘kinda’."}],[{"start":null,"text":""}],[{"start":96.1,"text":"Or at least ‘kinda’ for the first seven months of the year: the gold price ebbs and flows inversely with TIPS yields, with gold prices generally falling — obviously unideal for people owning a lot of gold — but in the context of rising bond yields. Just like the good old days of pre-Feb-2022."}],[{"start":113,"text":"But since the start of September we’re back to a state of utter befuddlement. And almost to mock our understanding, the gold price has started moving lower just as bond yields have rallied over the past few weeks. We’ve had to uninvert the right hand scale to make the point:"}],[{"start":null,"text":""}],[{"start":129.68,"text":"With enough time and patience, we’re sure that we could build an overarching understanding as to what is really going on. But maybe first we should read up on the subject of apophenia."}],[{"start":130.18,"text":"Further reading:"}],[{"start":142.2,"text":"— Gold drops below $4,000 as ‘haven’ asset joins market sell-off (MainFT)"}],[{"start":148.36,"text":"— So you want to talk about gold (FTAV)"}],[{"start":154.76,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793159446_9982.mp3"}