Introduces topic: Gold is up 75% in a year, above $5000/oz, and guest says it's divorced from fundamentals but ascent continues.
Speaker1
Ruchir Sharma
Admits gold is totally disconnected from fundamentals (real rates, inflation, central bank purchases). Current price action is driven by financial flows and massive ETF buying.
Ruchir Sharma
Compares current gold rally to late 1970s momentum trades that keep going until a catalyst breaks them. The 1970s rally ended with a massive increase in real interest rates, which he doesn't see happening now.
Notes the negative correlation between gold and Bitcoin, contradicting the 'digital gold' narrative.
Speaker1
Ruchir Sharma
The gold phenomenon is unique but spreading to other commodities. Advises clients to diversify by buying other commodities, as gold rallies tend to drag them up.
Ruchir Sharma
Gold's risk is to the upside rather than the downside, at least in the near term.