I see some people saying, “it’s not gold going up, it’s the dollar going down” and things like that.

That’s not really the case, and there’s a simple test to see why.

When a currency crashes, it loses value relative to everything. Other currencies, real estate, stocks, precious metals, etc. Prices of normal goods and services skyrocket.

In this bull run, precious metals gained value vs other things. Gold vs oil. Gold vs stocks. Gold vs real estate. Silver vs oil, etc.

The dollar is rangebound vs other major currencies. The supply growth of the dollar this past year was 5%. It’s gold and other precious metals that went up vs everything. Partly based on fundamentals, and now seemingly due to momentum.

Now, where there is some truth to the statement: central banks in aggregate haven’t added to their holding of treasuries in ten years. The only foreign treasury purchases have been in the private sector, and at a rate lower than total US debt growth. But central banks have been buying gold. There is indeed a gradual shift toward neutral reserve assets afoot, ever since around 2009.

But that a very long process. That source of demand didn’t single-handedly drive the huge boom in precious metals over this past year. This was like a volleyball held under water and let go, soaring back up.