In case you missed it, gold decisively broke through the $2,000 per ounce barrier a week ago. Now, I know what you might be thinking – we’ve seen this before. Gold has teased us with breakthroughs in the past, only to retreat shortly after. But this time, it feels different, and here’s why.

For the first time in years, gold has not only surpassed $2,000 but has also held its ground for a week, reaching $2070 today on the first day of a new month. This sustained performance sets it apart from previous attempts.

The key game-changer? Rates. The market is now firmly convinced that rate hikes are a thing of the past, and this conviction is reflected in falling bond yields. As many of you know, real rates play a crucial role in influencing the price of gold. When rates or yields fall, gold tends to rise, and we’re currently witnessing this classic pattern.

Investors are showing a strong inclination towards gold miners, aligning with this classic pattern. The GDX fund, comprising major gold miners, has surged by about 7% over the week, providing nearly three times the leverage to gold’s gain of two and a half percent. This kind of momentum is indicative of a different and potentially game-changing scenario.

Courtesy of the Resource Maven