Group 1: Gold Performance and Market Sentiment - Gold is on track for its second-best performance in the last 50 years, with an increase of over 43% as investors hedge against geopolitical and monetary risks [1] - Institutional allocations to gold remain low, with only 2.4% of fund managers' portfolios allocated to gold, despite its strong performance [3][4] - A significant 39% of fund managers reported having zero exposure to gold, while only 6% have allocations of 8% or more [4] Group 2: Institutional Investment Trends - Fund managers are heavily concentrated in equities, particularly technology stocks, with a net 28% overweight position in equities, the highest level since February [4] - Cryptocurrencies are also largely absent from institutional portfolios, with two-thirds of respondents reporting no allocation at all [5] - Risk perception is a key factor in the reluctance to allocate to gold and cryptocurrencies, with 26% of respondents citing a second wave of inflation as the most significant tail risk [5] Group 3: Central Bank Activity and Demand - Central bank purchases of gold were neutral in July, marking a pause after three years of record accumulation, where over 1,000 tons were added annually [7] - China continues to import non-monetary gold above the five-year average as part of its strategy to diversify reserves and reduce reliance on the US dollar [8] - This steady flow of gold imports from China provides structural support for gold, even as institutional allocations lag [8]

Now, everyone knows that the stock market continues to fly higher and that pessimists are screeching that everything is overvalued. The bears, they do have plenty of data to point to. The S&P 500 is now trading at 3.15%x sales.It's the highest valuation in history. Not so fast, my friends. There's a number of considerations worth unpacking here.For example, the US stock market is denominated in dollars, as you all know, and those dollars have been debased at a much faster pace than what the public has been ...