The US stock market recovery has pretty much been engineered by its Federal Reserve Chairman, Jerome Powell due to his unprecedented action in buying debt securities of US companies both investment and non- investment grade. This pretty much put a floor on the stock market meltdown earlier in the year.

His deliberate near zero interest rate policy which he reiterated last week, will be low for longer together with his willingness to tolerate inflation for the sake of future, higher employment; have given strong signals that alternative investments such as US treasuries, will be highly unattractive over the longer, medium term.

Moreover, the current US China trade war along with some questionable US policies leveraging the US dollar as the world’s de facto reserve currency, will possibly lead to higher purchases of gold by governments in lieu of the US dollar and US treasuries.

The sheer size of the printing of money by the US Federal Reserve which has no historic comparison to its scale, accompanied by Japan and the removal of its cap by the European Central Bank, also leads to unchartered waters with respect to how this will play out in the future with respect to inflation and the cheapening of currencies.

Irrespective, I find US equities unattractive at current valuations to accumulate further and my holding of cash at too high a level for when the cash will need to be drawn down. The combination of the above factors has led me to partially put some of the excess cash into Gold as a hedge against the possibility of devaluing currencies. I prefer Barrick Gold than pure gold as it is a well- managed gold mining company with its largest mine in the US, a strong balance sheet but one that still gives me leverage to higher gold prices without taking excessive financial risk. Barrick Gold’s share price will continue to pretty much follow the price of gold. Any short- term corrections in the gold price in the coming months, will lead to my further accumulation of Barrick Gold’s stock unless unforeseen, company specific events happen that leads to removal of the correlation.