Daily Chart 01/04/21

Daily Chart 01/04/21
Posted on: The Daily Chart
01/04/2021

Daily Chart 01/04/21

Eurozone inflation rose to 1.3% in March, the highest level since the start of the pandemic. This is still far below the ECB 2% target but the latest evidence inflation is becoming a theme again. Gold is seen by many, including us, as a good inflation hedge and should have increased with inflation. As an investment the golden hedge has not worked out yet as the gold price in USD is down 19% from its high last August and back to pre-pandemic levels.

The main reasons:

Real interest are increasing as nominal yields are rising faster than inflation and
Gold ETF’s became big sellers due to redemptions after significant inflows last year and
Crypto is competing as it is considered the new gold and
The USD.

We believe however the current consensus negativity around gold could prove a golden opportunity for the patient investors.

Gold prices and 10 years real yields

 

Take care not to become victim of any 1st of April jokes ( Voltswagen ? ),

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