Gold Does Not Shine
Dear Ladies and Gentlemen
Gold does not shine this year, and whether you believe it or not, I receive many inquiries, messages and sometimes mails that show an inevitable frustration. While I understand people being frustrated about staying in an asset class that is not moving up while everything else seems to perform well, after all, we live in a „relative to expectations world“, I do not see it as our responsibility to make gold move in the «right» direction, only because we are the producers of the «In Gold we Trust» report. Last year and the year before, gold performed well and maybe what we see this year is just a consolidation.
In Gold we Trust (IGWT)
Yes, we publish the Incrementum Gold Report (IGWT) every year, and yes, it is written positively, and yes, gold currently does not rise. This may be very unfortunate, but it is also part of the game of investing. We are in it for the long-term, and speculation is not our business, and yet, Ladies and Gentlemen, the reason why we are positive on gold in the long-term has not changed one bit. We regularly publish our opinion and explain in detail why we do believe in our conclusions. As a matter of fact, my partner Ronni Stöferle was holding a keynote at a conference in the U.S. yesterday on the topic, and according to the feedback I gathered, it was very well received.
Drivers of the gold price
One would assume, free liquidity for almost everyone, cheap money, i.e. low interest rates and low bond yields, political tensions, inflationary pressure, would, under normal circumstances, lead to higher prices in precious metals. Instead, however, equities are up, cryptocurrencies are up, even bonds are up, only gold is performing disappointingly.
Why?
During our investment committee meeting last week, we were indeed discussing this year’s underperformance of gold.
So, Ladies and Gentlemen, what do you think, why is gold not moving up? I am sure all of you have some ideas for it, and I would be pleased to receive your feedback.
Is it maybe a simple question of competition of funds, or are cryptocurrencies taking the role of gold among younger investors and proposing far better speculative returns? What are the reasons?
Your call!
This is your call, Ladies and Gentlemen; please send me your concise ideas. Your opinion counts. I will consolidate your views and publish them in my next weekly mail.
As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to: smk@incrementum.li
Many thanks, indeed!
I wish you an excellent start to the day, a wonderful weekend, and above all, good health!
Yours truly,
Stefan M. Kremeth
Wealth Management
Incrementum AG – we love managing assets
Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li
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