One of the primary reasons that gold shot up to $1940 following the 2008 Credit Crisis and subsequent stock crash is because long standing safe havens like currencies, bonds, and real estate no longer provided an outlet during a time of financial crisis. And while these three asset classes eventually recovered between 2011 and 2016 thanks solely to central bank interventions, when the next crisis or black swan would come as it did on June 24, monetary conditions were so levered up that they once again were unable to act as an outlet or safe haven for one's wealth once the carnage began in nearly all markets.
And this showed up in a most powerful way as immediately following the referendum vote in the United Kingdom to leave the European Union, searches on google for the terms 'buy gold' shot up over 500%.
According to Google, the number of internet searches for the phrase "buy gold" spiked by 500% after the Brexit results trickled through around 5am. Investors flocked to the safe haven asset during Asian trading while the pound plummeted to a 31-year low.
Today, as is customary after the fact, everyone was euphoric on gold: "gold could rise to $1,400 whilst other precious metals such as platinum, offer attractive fundamentals," said James Butterfill, head of research & investment strategy at ETF Securities. Virtually every other investment bank followed suit and even Goldman came out, when the traditionally goldophobic bank had no choice but to raise its gold price target following today's meteoric gold surge.
Which is great, however all of it was, as noted, after the fact.
The truth as all those who buy gold after the devaluation learn, is that for gold to be a store of value and preserve purchasing power it has to be acquired before some catastrophic, devaluing event, which as yesterday's Brexit showed, tends to be utterly unpredictable. - Zerohedge