Tocqueville Gold Strategy Investor Letter

In our view, gold is exceptionally cheap at the moment because the radical monetary policies practiced by the world’s leading central banks have led to an egregious mispricing of risk by investors at large. We believe that the Fed’s continuing (and increasingly glaring) inability to normalize interest rates validates our long standing thesis that monetary extremism cannot be unwound without triggering a slew of unacceptably painful consequences for the holders of risk assets and bonds. The dollar gold price has been the main loser from the resurgence of confidence in financial assets and the resultant multiyear rally. Once investors discover that there is a bite to the “risk” in risk assets, gold could be the big winner.