Aktuelle Frage im Economics Forum:
„Trotz verschiedener geopolitischer Krisenherde sowie der jüngsten Volatilitätssteigerung an den Märkten, konnte Gold den Bärenmarkt noch nicht verlassen. Was steckt hinter der schwachen Entwicklung des Goldpreises und welche Faktoren könnten Gold in einen Bullenmarkt versetzen?“
Current question in the Economics Forum:
“Despite various geopolitical crises as well as the recent pickup in market volatility, gold has not yet been able to exit its bear market. What are possible explanations for the weak development of the gold price and which factors or events could cause gold to finally enter a bull market?”
“Two key influences are the rising US dollar and prospects of higher US interest rates. Gold falls as the dollar strengthens because it is priced in dollars. As interest rates are raised, the cost of holding gold rises. If the Fed increases rates while other central banks do not, this results in further dollar appreciation.
As an investment, gold does not tick many boxes – in a low return world where investors are chasing yield it offers no income stream; it does not appear to be a favoured safe-haven despite ongoing geopolitical concerns; there is little evidence anywhere of inflation which would bolster demand for gold as a store of value. Physical demand for gold has fallen since 2013 and faces negative influences including Indian import restrictions (jewellery) and substitution (technology). Overall there is little to suggest positive momentum for gold.
Glimmers of hope for a gold bull market – the world including the US steps up QE, a collapse in confidence in fiat currencies or if a country, perhaps Russia, backs its currency with gold. Otherwise, gold is likely to trade in a range.”
Nadège Dufossé, Head of Asset Allocation, Candriam (24.11.2014):
"Gold is usually considered as a good hedge against inflation or tail risks. Gold prices have declined by around 33% since their 2012 top. Inflation is not a threat anymore despite the strong increase in Central banks’ balance sheets. Real rates have increased in the US and should continue to do so with inflation expectations under control. This is a negative context for gold prices that should not resume their previous bull trend. Is gold a safe haven in case of increasing geopolitical risks? Such events could temporarily support gold prices. Remember that during last crisis in 2008, gold prices slipped along with other assets and did not offer a good protection against volatility. A bullish trend for gold prices would mean that we have the wrong economic scenario and that real rates would decrease instead of increasing."