“Chance favours the connected mind.” – Steven Johnson ||
Hello everyone! I hope you’re all doing well. A shorter email than usual today as I have a schedule squeeze.
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IN THIS NEWSLETTER:
Why the gold correction is good news
Also: no summit, Tether, crypto M&A
WHAT I’M WATCHING:
Why the gold correction is good news
In a hall-of-fame-level correction, the gold price fell almost 8% over the past 36 hours, the steepest drop in 12 years. It has since stabilized and, as I type, is trading around $4,060/oz, almost 7% lower than its level early yesterday.
Signs had been flashing this was due for a while: the astonishing climb that was starting to feel relentless, the images of retail queues to buy bullion, everyone talking about gold and wondering what they were missing – the “safe asset” market had gotten frothy.
(gold $/oz chart via TradingView)
Painful losses aside, yesterday’s move is good news, for both gold and Bitcoin.
First, what we saw yesterday was a welcome dent in the “doomsday hype”. Yes, fiat currencies will be diluted as fiscal spending accelerates around the world. But we’re not heading into an immediate currency crash, so the queues outside gold bullion retailers were a sign the narrative had gotten out of hand.
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