Bullish on Bullion

The weakening of the decade-long correlation between real yield levels and gold is not only a reflection of the current higher inflation regime, but also reveals stronger structural demand, says Morningstar. Meanwhile, emerging market central banks have ramped up their gold holdings in an effort to gain more independence from the US dollar, and the shift in China’s growth model has increased economic uncertainty, boosting physical demand for gold from local investors. Taken together, the confluence of these factors should support gold at a structurally higher price level than prior to the pandemic,...