Gold is back!

Ronald Stöferle is at the German Gold Fair. As part of this he also meets with Michael McCrae from Kitco News to talk about the latest developments in the gold market.

Gold is back!

The title says it all. In his last interview with Kitco News, Gold shone with how little people cared about it. The talk was about whether gold is not dead. And even though sentiment hasn’t changed that much to date, we have a much better setup today from a technical and fundamental standpoint. This should lay the foundation for gold and as we have seen in the last few days, it looks like this thesis could come true.

 

The most profitable year

Not only is the average gold price at an all-time high this year, no, the profit margins are also impressive. The free cash flow of the companies is also remarkable. All in all, things are looking very good for the mining companies. They should also benefit from a rising gold price. Another point is that investor interest in this sector is still very low.

 

The end of the great moderation

The time of moderation is over. First, we were told by central banks that we needed more inflation. Now it is here and we are told it is only temporary. However, inflation is the only way to somehow get a grip on the huge and ever-growing mountains of debt. We already discussed this last year in our special report on inflation and those who want to protect themselves from inflation should definitely read it. Moreover, real interest rates are one of the most important reasons for the bull market in gold. These will have to remain negative for quite some time due to the large debt burden. This is very good for gold and should take us to higher prices in the long run.

 

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