But we have a known outcome for the economy and markets.  That is, global policymakers, in coordination, will throw anything and everything at it, if necessary, to keep the confidence intact, to keep markets afloat and to keep the global economy moving.  We're seeing it.  

As of this week, we've had a globally coordinated message from finance ministers and central bankers.  And we've seen action from global central banks, including an emergency 50 bps rate cut from the Fed. 

Next up:  Big and coordinated fiscal stimulus and aid is coming.  

That's a green light for gold.  

Two weeks ago, in my Pro Perspectives note (here), I laid out the three scenarios for gold, which all pointed north.  We're now seeing two of the three scenarios playing out together. 

Gold is being bought as a parking place of relative safety in the pandemic scenario (which was a low probability scenario — not low anymore). And gold is being bought as a hedge against the inflation penalty that many believe is inevitable, following the quadrupling in size of global central bank balance sheets since 2007, and the recent return to balance sheet expansion.  On the latter, central banks will certaintly have to fire even more bullets. 

But the magic word that's triggering the algorithms in gold (to buy) is "fiscal."  Deficit spending is about to ramp up across global governnments to support the global economy.  Gold will likely rise against all paper currencies. 

The post-financial crisis highs of $1920 aren't far away – from today's levels about 13% away from the September 2011 high.   

Where could it go?