In Gold we Trust 2018 – Gold and the Turning of the Monetary Tides
The 12th edition of the annual “In Gold we Trust” report titled “Gold and the Turning of the Monetary Tides”, has just been released by Ronald Peter Stoeferle and Mark Valek of Incrementum AG.
The report’s Leitmotif of the turning of the tide refers to three fundamental changes that are currently unfolding:
1) Change of the tide in monetary policy: the reversal from QE to QT will lead to a net decrease in central bank liquidity. This is the first big crash test for financial markets in a decade.
2) Change of the tide in the global monetary order: In 2008 central banks turned from net-sellers of gold to net-buyers. China, India, Russia and Turkey are the big official players these days. This is just one aspect of the big trend towards de-dollarization.
Gold will play a major role in the multi-polar monetary order of the future.
3) Change of the tide in technology: Crypto currencies and the blockchain-technology have come to stay.
Gold and cryptocurrencies are not foes, but friends. In fact, a collaborative approach would play to the strengths of both. The first gold-based cryptocurrencies are underway as we speak.
Further key topics and takeaways of the report:
- Inflation vs. Deflation – The Big Showdown?
- Precious Metals Shares – More Than Silver Lining?
- China – the global economy’s Sword of Damocles?
- Exclusive interview with Luke Gromen: “The dollar appears to be in Zugzwang!”
- Exclusive interview with Dr. Richard Zundritsch, FA Hayek’s nephew: “Hayek would prefer gold to Bitcoin”
Other key messages of this year’s edition of the In Gold we Trust report are:
• The risk-reward profile of the precious metals mining sector strikes us as excellent.
• In the great tug-of-war between inflationary and deflationary forces, inflationary forces have gained the upper hand in the course of the past year.
Since September of 2017 our proprietary Incrementum Inflation Signal also indicates that price inflation is gathering pace.
• Technical analysis by and large indicates a positive set-up for gold is in in place.
Sentiment on gold is pessimistic and there was a healthy adjustment in speculative positioning in the futures markets.
The seasonally strongest period for the gold price begins in June; this seasonal pattern in the gold price tends to be particularly pronounced in mid-term election years.
Summary
The authors expect significant upheaval in coming years that will have noticeable effects on the gold price.
“In view of the three major turns of the tide discussed in this year’s edition of our In Gold we Trust report, we are quite confident regarding the prospects for gold. Once the consequences of the recent turn of tide in monetary policy become obvious and the threat of recession looms on the horizon, demand for gold as a traditional safe haven is bound to return”, notes Ronald Stoeferle in summarizing the insights of this year’s In Gold we Trust report.
The In Gold we Trust 2018 report is another must read and the English versions can be accessed here:
News and Commentary
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Gold Prices (LBMA AM)
25 May: USD 1,303.95, GBP 976.53 & EUR 1,113.70 per ounce
24 May: USD 1,296.35, GBP 967.73 & EUR 1,104.88 per ounce
23 May: USD 1,294.00, GBP 967.91 & EUR 1,102.88 per ounce
22 May: USD 1,293.90, GBP 961.24 & EUR 1,095.29 per ounce
21 May: USD 1,285.85, GBP 959.24 & EUR 1,095.67 per ounce
18 May: USD 1,287.20, GBP 954.20 & EUR 1,091.16 per ounce
17 May: USD 1,288.85, GBP 952.07 & EUR 1,090.50 per ounce
Silver Prices (LBMA)
25 May: USD 16.67, GBP 12.49 & EUR 14.24 per ounce
24 May: USD 16.51, GBP 12.32 & EUR 14.09 per ounce
23 May: USD 16.53, GBP 12.38 & EUR 14.11 per ounce
22 May: USD 16.58, GBP 12.32 & EUR 14.04 per ounce
21 May: USD 16.34, GBP 12.19 & EUR 13.91 per ounce
18 May: USD 16.39, GBP 12.16 & EUR 13.92 per ounce
17 May: USD 16.39, GBP 12.14 & EUR 13.90 per ounce
