phone icon (877) 258-0181

Category: Special Reports

2022 Gold Forecast

   |   By  |  0 Comments

We’ve looked at some of the world’s foremost financial institutions to see what they predict the price of gold to be by this time next year.

As ever, we’d love to hear your views. Do you think that their predictions are too conservative or are they being overly optimistic?

Let us know your thoughts and we might publish them in the new year. Drop us a line at

Atlas Pulse Gold Report – December 2019

   |   By  |  0 Comments

By Charlie Morris.
See the facts, trade the action and ignore the noise.

In this issue: 

  • Reiterating bull market – this bull has legs
  • Inflation will come – the US embraces negative real yields
  • Bullish price target – $7,166 by 2030
  • Bitcoin – buy when the bear is done

Reiterating bull market

People tell me they don’t receive Atlas Pulse anymore. If you are reading this, you’re on the list, it’s just that I don’t write it very often. The last issue was a year ago when I upgraded gold to bull market (price $1,239) for the first time since 2012.

Unlike the gold bugs, I’m not a broken record. And unlike the barbarous relic brigade, I recognise gold’s importance in the modern world. Atlas Pulse analyses the gold price and outlines the bull/bear regime with the reasons why. It is an evidence-based approach with an enviable track record. I tell it how I see it and find the air-punching narratives tedious. You won’t find one here.

As I write, the gold price is $1,475, up 15% this year having touched $1,550 (+21%) in September 2019. If the current price holds, this will turn out to be the best year for gold since 2010. And as we move into 2020, I bring further good news; this bull market has legs. In this issue, you will find a bullish target of $7,166 that is logical and plausible. All that needs to happen is the return of inflation. It’s high time. But before I explain how I got to a $7,166 target; I’ll go back to basics first.

An Atlas Pulse Bull Market has three conditions that I came up with more than a decade ago:

  1. Easy money, defined as US cash real interest rates below 1.8% – TRUE
  2. The long-term gold trend in non-dollar terms must be positive – TRUE
  3. Gold must be beating the stockmarket – TRUE!


In 2019, the Fed have stood back from further hikes, and we’ve seen an increase in the balance sheet, as tapering has reversed course. “It’s not QE,” they say, but it doesn’t smell quite right regardless. Whatever it is, the Fed’s balance sheet is growing again and policy is easy.


Gold is rising in all currencies

Historically, it has proved to be important that gold rises in all currencies, and not just in US dollars. This simple test ensures we don’t mistake dollar bear markets for gold bull markets.

Since 2000, the world’s best currencies have been the Swiss Franc and the Thai Baht, and gold recently broke higher in both. That implies that gold is rising everywhere.


Gold challenges equities

As for gold beating the stockmarket, few seem to recall that it is still the best performing mainstream asset of the 21st century. It has smashed global equities, which have been held back by poor performance in Europe and Japan. Gold has also managed to stay ahead of US equities, which have been strong since 2013. Gold even managed to keep up with the emerging markets until 2008, which remain the leading equity region to this day. If only just.

Gold remains in the lead despite a savage bear market between 2011 and 2016 and having no yield to fall back on. It’s a remarkable achievement, that most people probably don’t realise.


Gold remains ahead of equities in the 20th century

Source Bloomberg: Gold (gold), Emerging markets (blue), US equities (red), World equities (black) including dividends in USD 1/1/2000 to 16/12/2019 rebased to 100

But we want to look forward, not back. You can’t escape that equities nudged past after the 2011 peak. The relative position is important because investors need to know that they can allocate large sums of money to gold without missing out on equity performance. If equities are lacklustre or troubled, it’s an easy decision to make. But if they are strong, like they are now, it’s harder.

I can’t promise that US equities will face imminent collapse, but for gold to rally, they don’t need to. The largesse in equities has, in part, come from economic growth, but bigger drivers have been easy money, financial engineering and stimulus. As we step into 2020, with the threat of tightening behind us, there is no reason for gold to lag equities in future. A Goldilocks scenario (just the right amount of inflation) seems to be unlikely, because we’ve already had that. And since late 2018, asset returns seem to have broadened out. It’s no longer just about US equities.

The chart shows gold versus US equities over the past five years. Gold (reading of 80), means it has only lagged by 20% in a roaring equity bull market dating back five years, which isn’t very much at all. And since September 2018, gold has been beating equities, with higher highs and higher lows. A new high above 92 would generate significant confidence in the gold market, as that would bank four years of outperformance. It really wouldn’t take much for that to happen.


Gold jostling for leadership

Source Bloomberg: Gold relative to (divided by) the S&P 500 capital return 19/12/2014 to 16/12/2019 rebased to 100

The Atlas Pulse conditions for a gold bull market are met. I said that this time last year, and I am reiterating that point now. Equity outperformance could be a little stronger, but at least there’s no material lag. The regime is with us, and next I’ll turn to the one thing that could change everything. This has the power to turn a dreary bull market, driven by falling bond yields, into something you can really sink your teeth into.


Inflation will come

US real interest rates are falling again, which means gold has a tail wind. In my opinion these will keep on falling in what could become a major theme for the decade. I am not saying that the Fed will slash rates to zero like the Europeans. But instead, rates will stay lower for longer, and inflation will rise. We can be relatively sure that the Fed will keep rates low, because they want to keep the party going. We saw that a year ago, as the ten-year bond yield went above 3%. The result? The stockmarket nosedived by 20% and they don’t want to see that repeated.


US real yields are falling

Source Bloomberg: US 10 year yield treasury (black), inflation expectations (red) and real (blue) since 1/1/2000

The real yield is the difference between the US government bond yield and the expected future inflation rate. It tells you how much you could make, after inflation, by investing in government bonds. The current rate is 0.1% which doesn’t sound like much but is much better than what you’d get in Europe.

The missing piece is inflation. Many believe that it won’t rise, because high levels of debt or demographic trends keep it under control. But there’s an external risk, namely the price of oil, and energy is the most important input cost in our lives. For example, food production requires diesel. If the oil price rises, food prices must follow suit. That squeezes the consumer, harms the economy and reduces purchasing power. Even if the green revolution surprises us all, it will take years before it becomes a dominant force. In the meantime, Asia keeps on growing.

According to the OECD, not only is China forecast to fly past the almighty USA by 2030, but India too. The US could be humiliated into third place. President Trump doesn’t like that idea and hence a new cold war with China is underway. Europe might be even more embarrassed as it may not have a single country in the top five. Indonesia, a nation of 300 million people by 2030, might squeeze past Germany. With Japan’s place relatively secure, an Asian decade seems increasingly likely.

While energy consumption has remained flat in the OECD countries, the fast-growing non-OECD countries have seen their consumption nearly double this century. It grows by 3.3% per year and shows no signs of slowing down. The US shale boom came to the rescue post 2006, bringing another 6 million barrels per day (mbpd) to market. That has kept a lid on the oil price since 2014, but if the non-OECD countries carry on at this pace, a future oil shock becomes more probable than possible. Consider that the OECD countries are growing too, and you can see how this Malthusian story mighty play out.


Oil demand growth is still structurally strong

Source Bloomberg: OECD oil demand (red), non-OECD (black) million barrels per day 1/1/1996 to 16/12/2019

And let’s not forget the growing US budget deficit. Deficits are not unique to the US either, as they are coming back into fashion. Japan has a stimulus package; the UK has one while Europe wants one. China will join the party too, and the world wants infrastructure like it’s the industrial revolution all over again. Demand for commodities will soar and the new gold bull market is simply telling you what lies ahead.


Bullish price target

As we approach 2020, it’s worth considering where gold might be by 2030. The 00s saw a 280% increase, and the 10s, a 35% increase. For the 2020s, I am forecasting a 415% return with a price target of $7,166. I’ll explain why.

A six year high for gold’s fair value

Source Bloomberg: Gold and Atlas Pulse fair value model (black) 16/12/1999 to 16/12/2019

Regular readers will know that I value gold using a method which can be found here.

Note that the fair value has made a six-year high; recovering the lost ground since the taper tantrum. Also note that gold has returned to a premium above fair value. With those points in mind, my bullish scenario has three components

  1. Falling real yields will boost the fair value to $3,386
  2. The premium will grow to 50% from the current 7%
  3. Actual inflation for the decade is 48%

The US long-dated real yield fell from 4.3% to 1.4% over the 2000s. That boosted the fair value of gold by 80%. The 10s saw further easing of real yields to 0.1%, which boosted gold by a further 15%. These don’t seem like big numbers and they aren’t. That’s because real yields are made up of the bond yield and expected inflation, but they are not equal in their contribution.

This important point is that the gold rally of the 21st century has been nothing to do with inflation, it’s been all about the falling bond yield. By my calculations, falling nominal yields have boosted gold by around 270%. On the other hand, weak inflation has actually held gold back, albeit slighty. I hope this becomes clear on the table below showing future fair value scenarios. The US 20 year bond yield is currently at 2.08% and 20 year inflation expectations are at 1.77%. That puts the fair value at $1,377, which is slightly below the current price, and highlighted in grey.

Source Atlas Pulse: Atlas Pulse fair value model assuming rate scenarios

If the real yield was to fall to -2%, different possible scenarios are highlighted in green. Notice how a 0% bond yield with 2% inflation brings us to $2,296. In contrast, a 2% bond yield with 4% inflation gives $3,386. That’s a big difference for the same real yield scenario of -2%. My 2030 scenario sees a -2% real yield driven by managed rates at 2% and inflation rising to 4%. That results in a $3,386 price target.

Can US real rates move to -2%. They can. UK real rates are currently -2.2%, Swedish are -1.7% and -1.3% in Germany. All you’d need is a couple of rate cuts to anchor the long bond, while inflation quietly rises towards 4%. With infrastructure spending about to splurge, it’s looking quite likely.

But it doesn’t end there as gold bull markets also attract a premium.


A rising gold premium

We should remind ourselves that the last bull market saw the gold price premium rise between 2005 and 2011. It started at a 55% discount and ended at a 51% premium by 2011. The monthly chart hides that, but it happened. Gold also went to a significant premium back in 1980, at the height of the bull market. It must have been at least 50%, but we’ll never know because inflation expectations weren’t known at the time as TIPS hadn’t been invented. Still, there was unquestionably a premium, because the animal spirits were off the record, as the history books remind us.


The gold premium will have a bull market of its own

Source Bloomberg: Gold premium or discount to the fair value model (black) since 1999.

The gold premium tends to be a trending affair. It would be wrong to suggest that just because an asset has a fair value, it must trade there. That’s not how markets work. More likely, the asset will mean-revert around fair value over the course of market cycles. What caught my attention was the new high for fair value on the previous chart, and what looks like a rising trend on this chart. More importantly, bull markets and premiums go hand in hand. Therefore, if my bull market forecast is correct, the premium will be right too.

The current gold premium is 7%. A move to a 50% premium means there is another 43% to be had before we get there. That means the gold price will touch $3,386 x 43% = $4,842.

But it doesn’t end there either. Next, we must add actual inflation. That is the inflation that actually happens, as opposed to what is expected.


Actual inflation

In the short-term, inflation doesn’t matter very much. If you are fortunate enough to live in the developed world, you don’t notice rising prices week after week. But over longer time frames, inflation is an enormous force. Look at the inflation by decade in the US.

1950s    24%
1960s    28%
1970s    158%
1980s    64%
1990s    34%
2000s    28%
2010s    19%

Source Bloomberg: US CPI by decade

At 19%, this past decade has seen low inflation. Perhaps that is unsurprising as we had a banking crisis. But that was 11 years ago, and low inflation won’t last forever. Normally change occurs when the status quo is deeply embedded in group think. The fiscal programmes come courtesy of a belief, by our masters, that cheap money will continue indefinitely. Those same folks thought the gold price would fall indefinitely in the late 1990s and were heavy sellers as a result. How wrong they were then and how wrong they could be now. If inflation returns, it won’t be the first time our masters got it wrong.

I don’t have a crystal ball for inflation in the 2020s, but the bond market does. It thinks the answer will be 19%; precisely what it was last decade. I am 100% sure that it won’t be 19%. Whether it’s oil, deficits, wages or policy, inflation will rise. I would hazard a guess that it will average 4% per year, resulting in 48% over the next decade.

That neatly brings the gold price forecast to $4,842 x 48% = $7,166

There you have it. A rational case for a gold bull market with a logical outcome of $7,166 by 2030. The margin for error is wide of course, but it makes sense to me. The beauty of having a target is that it makes you think. And the beauty of having a model, is that it enables you to continuously rethink your target. Please allow me to revise it in the next issue.



I am an amateur in bitcoin compared to gold. That’s probably because I started researching gold in 1999, whereas I have only taken bitcoin seriously since 2013. That said, I have, along with my team, built the world’s greatest forecasting tool for bitcoin.

The investment process is similar to my approach to gold, in that it is evidence-based. The difference is that external macro-economic factors don’t feature with bitcoin. Other than the supply side dynamics, bitcoin and gold have seemingly little in common, despite “bitcoin is the new gold” being a popular narrative.

My research has led me to conclude that bitcoin behaves like a tech stock. After all, it shouldn’t come as a huge surprise that internet money behaves like internet stocks. The main driver of bitcoin’s price is the size of the underlying network. I therefore built a system that measures bitcoin’s network.

I am currently writing a detailed note on my bitcoin models that you are welcome to read. The main model looks at “market health” and is not dissimilar to the Atlas Pulse gold process. Generally speaking, I am long-term bullish on bitcoin, just as I am on gold, but recognise there are prolonged, and painful, setbacks when it is best to sit on the side-lines.

The market health model comprises six independent models that are calculated using live data from the blockchain. They include long and short-term network activity, the behaviour of the miners, network velocity (a non-price measure) as well as valuation and the competitive pressures in bitcoin mining. The aim is to find weaknesses in the network that would be associated with significant falls in price. Thereafter, don’t sweat the small stuff and remain long during bull markets.

Source Market health strategy (red), bitcoin (black) simulated results from $100 invested on 1/7/2015 to 10/12/2019

The last signal came in late August which was bearish. The bitcoin price was significantly ahead of events in late June and the network wasn’t active enough to support such high expectations. The sell signal came just below $10,000. With a current fair value of $5,776 and a current price of around $7,000, I expect it to break lower. Atlas Pulse readers, who are interested in bitcoins, are welcome to visit the site at

If you sign up to the weekly market health report, you’ll not only be contacted when I have finished writing my market health piece in the coming weeks, but you’ll also hear from me when the next buy signal is given. Good deal I’d say. The last time I last called a buy signal on bitcoin was back in March 2015 when the price was $256. I know several of you acted, because I have grateful emails to prove it.



A warm thank you to the team at Glint for their help in the production and distribution of Atlas Pulse. Disclosure: I am upaid and am neither an investor nor adviser to Glint.


A price of $7,166 per ounce would value the world’s above ground gold supply at approximately $50 trillion. The world’s stockmarkets are currently valued at $80 trillion, which we know are pricey. A burst of inflation would see the value of equities fall, and gold worth roughly the same as the global stockmarket. Impossible? It happened back in 1980 and it could happen again.

What’s more, I haven’t even touched on gold’s friends. Silver currently trades cheaply, as do the miners and platinum. If gold touches $7,166 per ounce, you can’t expect silver to stand still. Back in 2011, the gold to silver ratio collapsed to 32. With silver trading at $17, a comparable move would see silver touch $140. Silver’s all-time high hit $50 per ounce back in 1980. It tried again in 2011. Third time lucky after four decades?

I wish you all a very Happy Christmas and a prosperous New Year. Here’s to 2020 and thank you for reading Atlas Pulse.


Charlie Morris Bio
Charlie Morris is Chief Investment Officer at Newscape Group and editor of the Fleet Street Letter and Atlas Pulse. A former Grenadier Guard, Charlie Morris entered finance via HSBC, heading up their absolute return offering during a 17 year stint notable for having a global economic meltdown bang in the middle of it. In 2012 he started Atlas Pulse, a regular report looking into the gold price and the validity of holding gold in your portfolio. Two years later, on leaving banking, he began editing the Fleet Street Letter investment round-up and took on the role of Chief Investment Officer at Newscape Group, a St James’s based investment fund, in 2016. Charlie is known and respected for his knowledge in multi-asset investing, absolute return, factors, gold and more recently, digital assets. His primary role is the Head of Multi-Asset at Atlantic House Fund Management, where he recently launched the Total Return Fund.

The information and materials in this document are an expression of opinion and do not constitute financial or other professional advice. You should consult your professional adviser if you require financial advice. We try to ensure that the information in this document is correct, but we do not give any express or implied warranty as to its accuracy. We do not accept any liability for error or omission or for any damages arising in contract, tort or otherwise from the use of the information provided.

Gold Explodes to the Upside: Creating Higher Highs

   |   By  |  0 Comments

This week gold carried on breaking out, creating newer highs and recording its highest level in over five years. This has been driven by multiple factors such as the middle eastern tensions, Brexit and the Federal Reserve indicating that it was prepared to do anything necessary in order to inflate away its debt bubble. This suggests that interest rates will converge towards zero and brings the prospect of further quantitative easing into the limelight. On the 21st of June 2019, Gold has hit a new high of £1109 (in sterling terms) and settle just below $1400 (in dollar terms).


Gold surged on signs the Fed is moving closer to cutting rates

Source: Bloomberg

The FED’s comments in our opinion has created significant support for gold and will lead to further interest for the general investment community. Not long ago we indicated that with gold being in the doldrums for a large proportion of the last decade, this long term coiling action would lead to a breakout. This coiling action is signified by the green bars in the chart below.

With the financial world now starting to take a disproportionate interest in gold, it may be a good idea to make gold part of your wealth and start spending with it. Glint is the securest way to do this, not to mention it provides the most competitive premium on the market.

Special Report from Atlas Pulse – Gold’s 6 year high breakout

   |   By  |  0 Comments

Charlie Morris, Chief Investment Officer at Newscape Group and editor of the Fleet Street Letter and Atlas Pulse, explains to Glint what the gold breakout means.

In this issue…

  • Breakout – a six year high for gold
  • Thank the Fed – but don’t ignore Iran
  • Positioning – light compared to the almighty asset bubble
  • Equity bubble – gold has taken the lead




Source Bloomberg: Gold in US dollars with a 12 (blue) and 6 (purple) month moving average – past decade

I promised you an update on the state of this gold bull market when the breakout came. It happened on Thursday night, first on the back of the Federal Reserve’s commitment to ease monetary policy, and then had another jolt as tensions rose in Iran. This is a big deal, as gold has just made a six-year high. In this piece I will examine the sustainability of this move.

Moreover, the US dollar has been the strongest currency of them all. That gold in now flying in dollar terms, is a sign of strength. The next chart puts that into perspective by showing gold in a range of currencies since the market peak in 2011. Dollar gold is shown in thick red at the bottom. Second worst performing gold price comes in Thai Baht, closely followed by gold in Renminbi. Has Thailand been overlooked as a hub for sound money?


No currency on earth is stronger than gold

(and don’t say Bitcoin because it’s not a currency)

Source Bloomberg: Gold in a range of currencies since August 2011 rebased to 100 log scale

Gold has been weakest in US dollars (-24%), Thai Baht (-22%) and Chinese Renminbi (-18%). In contrast, cold has been strongest in Turkish Lira (157%), Russian Ruble (66%) and South African Rand (57%); not to mention Venezuela, Argentina and so on. Gold has made all-time highs in Japanese Yen, Canadian Dollars, Aussie dollars, Mexican Pesos and is just 3% away in British Pounds and Euros. Eight years since the peak in 2011, and it won’t be too long before gold has made new highs across the board. The gold market has breadth.

Thank the Fed

US interest rates turned the corner in 2013, starting with the rhetoric. They halted stimulus, then said they would hike rates, then kept reiterating that point until they finally did it in late 2015. That first rate hike coincided with gold’s low at $1,050. Then by late 2018, we saw the ninth hike and the stockmarket didn’t like it. The Fed reversed course. They said they’d slow, then they’d hold, then they’d ease etc. Presumably they’ll soon cut. It’s a reminder that words can have more impact than actions when it comes to central banking.

All about rates


 Source Bloomberg: US ten-year bond yield RHS (blue), ten year inflation expectation (red), Fed funds (black), real rate (green) and gold in USD LHS (gold) since 2012

Much of the gold story can be explained by interest rates and inflation. The important line is the green one, real rates. That is the ten year yield less the expected future rate of inflation. When real rates are falling, bond yields are falling relative to inflation (or inflation is rising relative to bond yields. The bottom line is that gold benefits from falling real interest rates and vice versa. They have been falling aggressively since December, shortly before the last hike. And with President Trump in the White House, are likely to keep on falling. Property magnates love easy money.

Using magic, I have turned the green line above into a fair value for gold.

Gold has good reason to rally


Source Bloomberg: Gold in USD and the Atlas Pulse Gold fair value model derived from US 20-year bond prices since 1998

The model essentially mimics a hypothetical, zero-coupon, US 20 year inflation linked Treasury bond. It fits like a glove and gold has been closely following this thesis for a decade. If gold is way above the model, it is trading at a premium, and below, at a discount. Gold is currently slightly ahead of events, but mot materially. Below is the same chart again, but zoomed in over the past five years.

The breakout is justified, but slightly ahead of events

 Source Bloomberg: Gold in USD and the Atlas Pulse Gold fair value model derived from US 20-year bond prices since 2014

 Major price breakouts are important technical events. Typically, a price flirts with a major level, in this case around $1,370, several times before finally breaking through. Many traders will have various options strategies at that level, and market mayhem kicks in when the price finally passes. Breakouts are rarely quiet affairs, particularly when dealing with a level that has been tested five times over six years. Gold could ease back, but the odds are that it won’t. What was resistance, becomes support. And given the Fed is now committed to easing, gold has the wind behind it.

Iran and the Strait of Hormuz

Gold has a history of being a safe haven asset, particularly during times of geopolitical stress. I would hate to profit on the back of human suffering, but it is important to understand what is going on. The breakout on Thursday night came in three moves. The first was due to the Fed which drove gold to $1,360. Then during Asian trading hours, gold surged again on the news of the attack on the US drone, followed by the threat of retaliatory air strikes.

My point is that the Fed’s move saw gold’s fair value shift higher and the price move was justified by fundamentals. The geopolitical troubles could escalate but will only drive the price to a premium, rather than shift fair value itself; notwithstanding an oil shock. But when tensions ease, that premium will evaporate. Investors should understand why they are buying gold. If is the war premium, then inside information from the command bunker would be extremely useful. But if it’s monetary policy, better to have spies at the Fed. Unfortunately, I have no spies, just publicly available data.

Rate scenarios

It’s worth outlining a few scenarios for gold under different rate regimes

  1. Current situation. 2.25% 20 year bond yield and a 1.75% 20 year inflation expectation gives a fair value of $1,307
  2. If the bond yield went to zero on current inflation, expect a $2,000 fair value
  3. Japan scenario, zero yield, 0.2% inflation then a bit over $1,021
  4. German scenario, yield 0.1%, inflation 1.2%, circa $1,700
  5. Stagflation, yield at 2%, inflation at 4%, $3,350
  6. Modern monetary theory? Who knows, but it would be very bullish
 Source: Atlas Pulse predicted fair value for gold under different interest rate scenarios. Current rates in grey.


Looking how investors are positioned is important. Normally we look at the futures market and record the longs and the shorts. We also look at the size of the exchange traded funds (ETFs). Putting this together gives us a sense of whether investors are already heavily invested in gold or have yet to make their move.

But how useful is this information?

In the next table, I show the relationship between positioning from the futures and ETFs against price. The data has been calculated using five years of weekly data.

Investor type Correlation to the gold price
Futures longs 61%
Futures shorts -50%
Net futures (long less shorts) 67%
ETFs 69%
Combined 84%
Source Atlas Pulse

The futures are quite good with the longs explaining 61% of price in a correlated manner. The shorts, less so but still 50% negatively correlated isn’t bad. The net position is a healthier 67%, but the ETFs are better still at 69%. Now for the exciting bit. The complete picture from the financial investors, which combines net futures and ETF flows shows a whopping 84% correlation. Investors should take note.

Flows drive the gold price


 Source Bloomberg: Gold in USD and the COMEX net futures position (long minus shorts) plus gold held in exchange traded funds in million troy ounces since 2014

It is one hell of a tight fit, with a 48% R squared over the past five years, jumping to 67% over the past three. It implies that for each million ounces (moz) of gold that investors buy, that adds approximately $6.50 onto the gold price. In other words, to see gold at $1,500 you’d want to attract another 15 Moz into the market. Is that possible? Of course.

Looking at this another way, investors have held an average of 80 moz over the past ten years, which is now 92 moz. You could say they own too much, but then the total ETF market was far smaller a decade ago than it is today. To the best of my knowledge, the ETF market has grown six fold. That means the 72 moz held in ETFs (20 moz is held via futures) is much lower on an adjusted basis than the 53 moz held in 2009, oe even the 82 moz held at the peak. To put it another way, investors have bought 30 million ounces since last autumn which cost them around $40bn. But when you consider how large financial markets have become, that might not be very much at all.


I illustrate this point in the next chart which shows the ETF holdings in dollar terms, as a percentage of the US total equity market value (market cap).


Gold is 0.3% of US equities

Source Bloomberg: Gold held in ETFs a percentage of US total market capitalisation since 2009

Gold ETF holdings used to represent 1% of US equity market cap in 2011, a number which has dropped to 0.3%. That is gold used to be equivalend weight as Exxon, a global giant, has now dropped to Starbucks. Gold doesn’t seem like a crowded trade to me.

The stockmarket bubble and demand for alternative assets

Which brings me onto the last point; the stockmarket bubble. Who knows how much further it has to run. Lot’s probably, given the support from the Fed. But my last chart shows the  relationship between gold and the S&P 500. The trend now favours gold. High time too.


Gold is now leading the stockmarket

Source Bloomberg: Gold relative to the S&P 500 with 50 and 200 day mov averages past two years


Thank you to Glint, our sponsor. Glint was founded by my old friend Jason Cozens to bring gold into the modern age. It sees your gold safely locked in a vault, while you text it, email it, hoard it or spend it using Master Card. It’s legal and compliant and it works.

I am not paid by Glint, nor an investor or an adviser. They manage the production and distribution of Atlas Pulse, and I just write it. Thanks to the team for their help.


I promised you an update on the great breakout and I have delivered on my word. That begs the question what the next big target is. $1,600 is where the next point of major resistance is, but it may take a while. Or not. I’ll write one then, if not before if something interesting happens or there is a change to the thermometer. And don’t forget, even if you hate gold, its strength is saying something. When gold is falling, we know that the central bankers are doing a great job. When it’s rising… Mmmm.

A move from 0.32% of gold ETF holdings back to the 2011 bubble high of 1% of equity market cap, would imply investors would need to buy 150 million ounces of gold. If a million ounces shifts the price by $6.5, a bubble today would see a price closer to $2,400. Food for thought.

Please take moment to look at my various activities below. The first two will cost you, but the third is free. Thank you for reading Atlas Pulse


Best Regards,

Charlie Morris

Head of Multi Asset,

Editor, The Fleet Street Letter,

CEO and Founder,

Facebook Does Astrology

   |   By  |  0 Comments

The world of cryptocurrencies just took another strange step, with the announcement that 2020 will see Facebook launch Libra, a ‘digital currency’. Libra will operate via blockchain technology. Facebook is reckoned to have 2.38 billion monthly active users, although statistics are a fast and loose business when it comes to social media and the internet.

Facebook’s mission, it says, is “to give people the power to build community and bring the world closer together.” That’s news to me. I always thought it was the more noble cause of making money. Why else would it have snapped up WhatsApp, Messenger, Instagram and other social media platforms but to build ramparts against assaults on the Facebook Empire? But let’s leave that aside for now.

Libra will be managed by its 28 founder organisations (including Facebook) who have agreed to form the Libra Association, the Geneva-headquartered organisation that will operate the cryptocurrency, with each investing a minimum of $10 million into the project.

A digital ‘wallet’ app called Calibra will allow people to buy and sell Libra. The Libra Association hopes that people will borrow Libras, buy goods with Libras, and pay bills using Libra. Facebook insists that it will not use any financial data for advertising purposes, and that the currency will be independent from the company.

Given the mess that Facebook got into recently over the collection and use of personal data, one might be suspicious of the promise that this venture is not a data collection exercise.

So why is Facebook creating Libra? It says it wants to give those “1.7 billion adults globally” who “remain outside of the financial system with no access to a traditional bank” the chance to access financial services and cheap capital. We can all say “Amen” to that.

But there are some serious questions that need to be posed about Libra.

For one thing Libra will be tied to reserve central bank assets which largely will mean paper currencies. The reserve of currencies will be invested in low-risk assets such as government bonds. More paper.

Then there is the issue of regulation. As yet the US Securities and Exchange Commission has not ruled on how it regards Libra but Charlie Delingpole, CEO of Comply Advantage, an anti-money laundering consultancy, has said that the “Facebook coin will do for money laundering what Facebook did for fake news — likely lead to an explosion in terrorist financing.”

Libra is not a challenge to Glint. Unlike Glint, which is entirely allocated-gold backed and regulated by the UK’s Financial Conduct Authority, Libra is backed by paper. Libra users will not own their Libras – the central banks backing the Libras will. Facebook is a globally known brand and has the power that goes with that. Its currency may succeed in persuading social media fans to flock to it. But wiser heads will turn to Glint as a way of both defending their wealth and also as a convenient way of buying anything. Download the Glint app now and find out more.