The tenth ‘In Gold we Trust’ report, written by Ronald-Peter Stöferle and Mark Valek, and published on 28 June, 2016 claims that gold is back with a new bull market emerging.
The report also found increasing uncertainty about economic and political developments has boosted the gold price and that with ongoing monetary stimulus, the BoJ and the ECB are creating the equivalent amount of the world’s entire annual gold production via their QE programs each month.
BREXIT has caused uncertainty which will negatively affect growth, and the report finds that further monetary and fiscal stimulus is to be expected to counter further disintegration of the EU.
A major contributor to gold/commodity weakness of the last few years has been the strength of the dollar, the report finds. “The narrative of economic recovery is crumbling; US recession cannot be ruled out; faith in monetary policy measures declines,” the authors write, predicting that continued depreciation of the US dollar and strength in commodities may lead to higher inflation, or maybe stagflation.
The persisting low interest rate environment is leading to a revival in interest in gold investments on the part of institutional investors, the authors find, and say that in addition to gold, this generally means a positive environment for inflation-sensitive assets like silver and mining stocks.
The report can be downloaded here.
