Gold: Kind of stuck in the middle - but not for long!
Gold: Kind of stuck in the middle - but not for long!
Comment:
So it seems clear that this time, too, gold may well continue to go sideways or down for some time, despite the crisis or precisely because of it. Overall, however, I personally see rather good conditions for a rising gold price. In particular, the rescue attempts by central banks, which are currently once again turning on the taps in the fight against the crisis, could in my opinion drive up the price of gold in the long term. It was only on Sunday that the US Federal Reserve surprisingly decided on a further interest rate cut and other measures. All the money from the central banks will not reach the real economy. As has been the case so far, it will drive up prices on the capital markets in the medium to long term, i.e. for shares, real estate and also for gold.
For the central banks seem to know only one remedy: More credit and money, provided at ever lower interest rates. You don't have to be a highly decorated economist to understand that all this amounts to a monetary policy that ruins the purchasing power of money.
The long term consequence of this is clear to me: gold is becoming more attractive to investors - especially after the price decline since March 9, 2020.
For the central banks seem to know only one remedy: More credit and money, provided at ever lower interest rates. You don't have to be a highly decorated economist to understand that all this amounts to a monetary policy that ruins the purchasing power of money.
The long term consequence of this is clear to me: gold is becoming more attractive to investors - especially after the price decline since March 9, 2020.
Comment:
Patience is the key. If you want to lose quickly, invest elsewhere. If you want to win slowly or at least preserve your savings, invest in Gold for the time being and then switch to the MSCI World / S&P 500 sometime in 2021. I'll keep you updated.
Above all, stay healthy. All the best!
Above all, stay healthy. All the best!
Comment:
The past trading week has seen the gambling Wall Street sluts still not hearing the gunshot and still hoping for some kind of miracle to rid them of their speculative equities sins.
Well, the better, the greater the atonement will be.
Well, the better, the greater the atonement will be.
Comment:
The Wall Street sluts are still hesitating. They should do it for all I care.
However, the price of gold is not made in the physical trading of coins and bars. It arises in the futures market, for example on the London precious metals exchange. Investors of other calibres are primarily active there. And most of these are currently on the seller side.
In times like these, when the stock markets are really going downhill, the saying 'cash is king' applies above all. Then investors sell everything, including gold holdings. Because they have to meet margin calls on other markets. That is why gold holdings are also liquidated; also because most of them are in the black after the rise in the price of gold in recent months. Additional collateral, so-called margin calls, which many investment professionals have to deposit with their brokers in the face of high losses, probably play a role here.
The outflow of funds from gold funds in these days fits this: on Friday last week alone investors withdrew funds worth 17 tonnes of gold from the most important gold ETFs in the world, the highest value since December 2016, as recorded by the news agency Bloomberg. The London Commod Exchange recorded daily trading volumes of $100 billion and more for the precious metal last week - values that did not exist before.
The price development is similar to that which emerged at the low point of the financial crisis in 2008: In autumn of that year, the financial markets went into a broad downward spiral after the US major bank Lehman Brothers went bankrupt. At that time, gold also proved its worth as a crisis currency only to a very limited extent: the price of gold was under pressure at the end of 2008 and for much of 2009. Subsequently, however, the price of gold rose sharply, reaching a record high of more than $1900 an ounce in 2011.