After a powerful gold (XAU) runup in the age of COVID-19, the precious metal has re-entered its all-time-high zone. According to a leaked slide deck, infamous investment firm Goldman Sachs is still quite cold on gold (as it is on Bitcoin).

Goldman’s presentation came a couple of days ago (May 27), with a focus on gold, Bitcoin, and general inflation.

In short, they are generally not enthralled with the shiny, somewhat useful metal as an investment over time; only in specific circumstances did GS find that gold outperformed dollar inflation, with other asset classes like equities and real estate reliably beating it.

Goldman Sachs did note, however, that while gold generally does not offer “reliable downside protection,” in certain select circumstances—giving the example of the 1973 crisis caused by the Middle Eastern oil embargo—gold can provide “tremendous downside protection” (i.e., a hedge against other falling assets).

Looking at the charts, though, we may be seeing one of gold’s exceptional periods. The shiny metal has been reliably uptrending throughout 2019, and the onset of the covid-financial-crisis has done nothing but push it higher.

back at the highsXAU chart by TradingView

It has in fact entered the general zone of its previous all-time-high, set down in 2011. A rejection around here is entirely possible; but given the exceptional circumstances in the global economy at the moment, a break of this level cannot be discounted entirely.

The views and opinions expressed here do not reflect those of and do not constitute financial advice. Always do your own research.

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