Gold breached a long-held trendline as inflation rose, prompting increased demand for gold coins from the US Mint. While gold is often proclaimed to be "dead" as an investment, as was claimed in a 1997 article, it has historically risen in value during periods of high inflation and monetary expansion like the current environment. Though the gold mining sector is relatively small compared to technology giants, its small size means investment flows could have an outsized impact on prices.

1. The Death Of Gold

2. Points To Be Discussed Today:
• "Gold Is A Goner“
• Gold Breached A Long-Held Trendline
• U.S. Mint Gold Coin Demand On Track
• Gold Spot/U.S.Dollar
• XAUUSD 1 Hr, 4 Hr Chart
• The Gold Sector Is Relatively Small, But That
Can Be A Positive

3. "Gold Is A Goner"
• BACK in December 1997, the Financial
Times ran a now-infamous article titled
"Death of Gold" writes Frank Holmes
at US Global Investors.
• In it, the author Kenneth Gooding
claimed that as an investment "gold is a
goner".

4. Gold As A Mere Metal
• The crises of the past 10 years – the 1987
stock market crash, the Gulf War, Asia's
financial meltdown – had not resulted in
higher demand, as one might expect.
• Gold was now a "mere metal" and a "bad
investment," Gooding concluded.

5. Reports Of Gold's Death
• But as it happened, reports of gold's death
were greatly exaggerated.
• The next decade saw the precious metal
steadily rise in price, eventually hitting a then-
record $1921 an ounce in August 2011, for an
increase of approximately 580% from when
the FT published its obituary.

6. Gooding Was Proven Wrong
• Fast forward to today, and the same gloomy
prognoses are being made about the
"barbarous relic", often by people who least
understand it.
• And just as Gooding was proven wrong,
today's doomsayers will end up with egg on
their face, I believe.

7. Gold Performed As Expected
• Gold performed as expected following last
month's monster consumer price index (CPI)
report. It showed inflation skyrocketing 6.2%
in October compared to last year.
• After already setting its longest winning streak
since May, the yellow metal broke out of its
downward trend going back to August 2020,
when it hit its all-time high of $2073.

8. Gold Breached A Long-Held Trendline

9. Gold Performed As Expected - I
• As I've said before, you shouldn't expect to get
rich investing in gold. It's not Tesla stock or
Bitcoin.
• Instead, I believe it should be held as a hedge
against poor monetary and fiscal policy.
• This is precisely why nearly every central bank
on the planet has gold on its balance sheet.

10. The Federal Reserve's Asset
• Speaking of balance sheets, the Federal
Reserve's asset purchases continue to rise to
unprecedented levels, despite Jerome Powell's
earlier announcement that the bank would
begin tapering this month.
• According to Bloomberg's Lisa Abramowicz,
official holdings now stand at a record $8.58
trillion, or about a third of US gross domestic
product (GDP).

11. U.S. Mint Gold Coin Demand On Track

12. The World Gold Council (WGC), 2021
• This, as well as blistering inflation, have
prompted buyers to gobble up American Eagle
gold coins at a healthy clip this year.
• According to the World Gold Council (WGC),
2021 coin sales at the US Mint have totaled
more than 1 million ounces through the end
of October, the greatest amount since 2010.
• Sales are on track to be the best in over two
decades, the WGC says.

13. Inflation At An High
• With inflation at an approximately 30-year
high, I believe it's only rational and wise to
have gold in your portfolio.
• As always, I recommend a 10% weighting,
with 5% in bars, coin and 24-karat jewelry, and
the other 5% in high-quality gold mining
stocks and ETFs.
• Remember to rebalance once a year or even
once a quarter.

14. Gold Spot/U.S.Dollar

15. XAU/USD Chart

16. XAUUSD 4 Hr Chart

17. XAUUSD 1 Hr Chart

18. The Gold Sector Is Relatively Small,
But That Can Be A Positive
• Technology giants dwarf mining giants, but that can also benefit
investors, said Yamana Gold's (TSE:YRI) executive chairman, Peter
Marrone.
• On Friday Marrone recorded Kitco Roundtable with Mining
Audiences Manager Michael McCrae, Editor Neils Christensen and
Kitco correspondent Paul Harris.
• The largest gold miner, Newmont, has a market capitalization of
$44 billion, compared to Apple's $2.57 trillion valuation.
Fractionally, Newmont is 1.7% the size of Apple.
• Tech companies have also been attracting more investors. The
Nasdaq Composite is up 22% year to date.
• The VanEck Junior Gold Miners ETF is down by nearly the same
amount over the same period.

19. The Gold Sector Is Relatively Small,
But That Can Be A Positive - I
• Give the gold sector time, said Marrone.
• "Vacuums have to get filled. The broader investment community
has to say: 'Where do I go to put my money?' And if the broader
market is trading at 13, 14, 15 times cashflow and precious metals
companies are trading at four to five times cashflow, I think it'll
find a home. That's where the money will go," said Marrone.
• When favor returns to precious metal companies, any cash turned
on the sector will have out sized impact due to the gold sector's
relatively small size, said Marrone.
• "In some respects, I believe what's holding the sector back .... is
relevance. Is it relevant to the broader investment community
when everything else is doing well? But when everything else is so
big by comparison, that's also the positive."

20. The Death Of Gold

21. Thanks for listening
The DeathOf Gold