2016: The return of Gold?

Posted: May 16, 2016 in Uncategorized

After a few years of pain…gold in 2016 has been the asset to be in 2016!

On the back of negative rates and the Reserve Banks that seems to have start to run out of ammunition the gold holding have increased by one quarter between investors.

Quite a few pro gold position

  • Interest rates increase bets  in US  where 75% at the start of the year…now just 4% (US rate hikes means stronger dollar and so weaker gold)
  • Negative rates have made quite a few investors scared – both as it shows that the Central Banks are running out of ideas and as “value refuge”
  • Volatility in general

For my point gold is a quite good for diversification.

Moreover, as I say from 2013, pay attention to the 1970s

1970 Gold Ounce USD35

1974 Gold Ounce USD 195

1976 Gold Ounce USD 100 (equivalent to a now $900/950…but the drop did not arrive there – probably as there is too much uncertainty in the world))

1980 Gold Ounce USD 920 (equivalent to now almost $9,000 – or even 12,000 (!!!!!) if you take into account inflation

Still hopefully this will not repeat o the letter…if gold goes to $12,000 something really bad would have happened. But a strong multi year rally could really be in the cards

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