Gold’s time to shine?

The gold price has recovered impressively since the last price drop and is again scratching the $1800 mark.

Rising COVID fears in the largest economies, the U.S. and China are tempting many investors to seek a safe haven. In China, falling retail sales and falling production figures are causing fears of a repeat of last year’s situation. Last year, lockdowns paralyzed the entire country.

In the U.S., recent positive employment figures have given reason to hope for a quick recovery. However, these hopes are now clouded by rising infection figures again. FED chair Powell has besides again stressed to be still far from the desired employment figure and therefore no premature tapering in prospect.

Is gold now awakening?

The gold performance YTD is at -6%. So if you look only at returns, gold investors have not had an easy time this year. Nevertheless, both news can be considered positive for the gold price, which is also noticeable.

The high inflation figures and how carefree the declining purchasing power is regarded also make thoughtful. If the inflation rate remains at a high level and all signs point to an increasing money supply in the future, then a significant reduction in purchasing power can be expected within the next few years.

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