Gold had a big drop over the past few days, but is still at about $1950 per ounce.

That is about 50% up on its typical trading range prior to the onset of Covid-19. And that, combined with a weak Rand, has significantly boosted gold shares and profits on gold firms. 
 
The correction was just that. It was somewhat triggered by Russia's announcement of a vaccine, which shifted investments back towards traditional investment havens. 

But it was also what they call profit taking, as in investors banking what profits they have made in anticipation of a fall. 

However, its still being driven by global economic realities. The fact is that the global economy has too much cash in it. 

Stimulus injections by major powers have driven interest rates down further than what quantitative easing had already done. 

The result is that there are fewer reliable havens for investors, so gold has once again become a last resort. 

It is expected by some commentators to reach $4000 or even $5000 before the current gold bull run cools down. 

The key reasons why gold will likely keep performing well are:

- Global stimulus measures
- Low interest rates
- A weaker Dollar
- Investor behavior
- Global uncertainty  

I have always been intrigued by the words of James who said to the rich, "your gold and silver has corroded and eaten your garments". 

I always thought he was predicting a future event, but on reflection he was criticizing a current event. 

Their pursuit of wealth had so shifted their priorities that their lives were otherwise in tatters and what mattered most was in disrepair. 

That is as relevant today. The world is so materialistic that its  insatiable hunger for wealth is artificially distorting global markets. 

For a long time, when President Trump was claiming his economy was the best ever, the US economy kept plodding at a sedate 2-3% GDP growth rate, nowhere near to the best its been. 

But the sentiment created by such language, artificially drove US stocks to dizzying heights. 

It seems to me more and more likely that eventually the house made of sticks will collapse under its own weight. 

Even now global stock markets are full recovered and doing well in defiance of the reality in our economies or on our streets. 

At some stage reality will hit home and markets will adjust, which under current circumstances, could lead to a depression. 

I would think that is the last thing this world needs right now, but its being fed by artificial stimulus measures and increased public debt. 

Of course I am delighted about gold and stock market recoveries. Its a silver lining in a world clouded by Covid-19. 

But I do sense it may yet paint our world into a dangerous corner to impair our establish economic fabric and punch holes into it. 

I hope not. 

(c) Peter Missing @ me2u2all.blogspot.com