Commodity markets

Gold rediscovered as the oldest asset class

Sometimes things happen fast and even faster than you think. The gold price in USD has broken its all-time high from 2011. The old investment lady is quite convincing in 2020. So far this year, gold has even outperformed the well-trained US technology stocks on the stock market. The price of the precious metal has been rising in various currencies for some years now, which in our view suggests that gold is certainly living up to its reputation as a currency alternative. Now the magical USD 2,000 mark is on the gold agenda. The Corona crisis has abruptly turned the (financial) world upside down and shaken it up once. Although the waves on the capital market have calmed down again, political and economic uncertainties remain very high. In view of the rising number of new infections in the USA, a second wave of infections cannot be ruled out. To cushion…

Gold as an ejection seat hedge in the rising „stock market jet

After a short pause for breath, the price of gold is now rising again and is currently only about USD 100 below its all-time high of 2011. In our view, it will be possible to exceed this level in the current rally, but not necessarily at the first attempt. The current reluctance of central banks to buy gold and the lower demand from jewellers argues for a slight price decline, at least in the short term. However, investment demand is currently very high. Fears of a second corona wave are growing. These uncertainties support gold. However, a second wave, which we do not expect, could also cause investors to panic again. In such a scenario, gold would also lose value. We maintain that gold profits from uncertainty, but not from panic. In the current environment, gold and the global stock markets are rising in step. But this is actually not…

Inflation – Waiting for Godot

A little concern about a renewed spread of the coronavirus is enough to tip the mood on the financial markets. This is what happened last week. Triggers were reports of a rising number of infections in the USA and a resurgence of infections in Beijing. This phase was ended, as so often in recent weeks, by the positive announcement of the US Federal Reserve on individual support measures. Such a scenario with rising infection figures is likely to be repeated even more often in the coming months. The pressure on central banks for further support will increase every time. An important variable for the ability of central banks to react is inflation. Fears of a significant rise in inflation have increased again significantly in recent weeks. The background to this is the enormous increase in debt and the measures taken by central banks. However, there are no signs that the…

Crude oil: super tankers are full

For the first time since January, crude oil inventories in the USA fell marginally. The price reaction was very positive. However, at least in the short term, we consider it excessive. Since some countries are moving into the post-lockdown phase, a recovery in demand in the second half of the year is plausible. However, the „pre-corona level“ remains a long way off. A more sustained stabilization of demand is not expected until 2021. Due to global supply cuts, the oil market will probably turn slightly into deficit in the second half of the year. However, this will at best be sufficient to minimally reduce the very high supply overhang in 2020. However, anyone who is happy about the slight decline in US stocks of 750 thousand barrels is blind on at least one crude oil eye. After all, over 30 supertankers filled with Saudi oil will be landing on the…

Crude oil market reflects economic downturn

We all know that the global economy is heading for a deep recession, which will probably overshadow past crises. On the financial markets, we can see little of this development so far. Although the stock markets fell by a good 40% in the initial reaction, the unbelievably high government pledges to support companies and private households have contributed to a rapid recovery of the stock markets. Equity market valuations are now almost back at the very high levels seen before the Corona crisis. In the bond markets, and especially in government bonds, the virtually unlimited commitments of the central banks are having an effect. There is hardly a bond segment that cannot profit from the purchases of the central banks. Here, too, the effects, in the form of higher government debt or increasing balance sheet risks of companies, are to be seen as very subdued, if at all. However, the…

Gold patient recovers

In the course of the Corona crisis, the gold price also came under pressure at first. Investors sold their gold to compensate for losses in other asset classes. Liquidity was in great demand. In the meantime, however, gold has developed a corona immunity. The gold price has risen by almost 18 percent since its low for the year. The most important medicine was administered to the gold patient by the Fed. The launch of an unlimited bond purchase program and the massive interest rate cuts showed their effect. Memories of 2008/2009 are coming back. At that time, the gold price also reacted very positively to the expansion of the Fed balance sheet. Since the Fed balance sheet has expanded by more than 45 per cent since the beginning of the year, there is much to suggest that the price of gold will continue to rise in the current environment. Investors…

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