Gold price fell from Thursday to Friday from 1,474 to 1,459 Dollars after positive statements from Trump consultant Kudlow on the trade war with China. But we know it – Larry Kudlow’s statements often have a very short half-life! Then in the course of the Friday the gold price could stabilize, and was this morning still with 1.465 Dollars. It is currently falling to 1,459 Dollars. The Dow had just made an upward move, and gold is falling in parallel. Is it heading back towards its low of 1,445 Dollars on November 12th?
Where is the gold price heading in the larger picture?
Where will the gold price continue to move? In a very recent video, Wall Street expert Markus Koch discusses the current situation with commodities professional Daniel Rauch from LBBW Asset Management. The stimulation of the central banks means lowering interest rates to a completely unattractive level. Earnings are no longer possible, so gold is an issue! According to Daniel Rauch, gold continues to function as a safe haven. Markus Koch mentions for this year the phenomenon of increased shares and at the same time increased gold price. According to Rauch, investors wondered whether they should still go into equities at high levels. Gold is a good alternative.
The convincing argument in favour of gold is that it cannot be multiplied at will. This is unlike, for example, paper money and government debt. Daniel Rauch mentions that there is no increased demand for gold at the US National Mint. The fear of ordinary citizens in the USA and thus their flight to gold is not present. But the demand for gold by ETF has increased. Behind it would be larger investors. Daniel Rauch does not believe in a falling US Dollar. Even if interest rates in the USA were to fall further, interest rate investments in the Dollar zone would still be more attractive than in Euroland.
Rauch advises all private investors to buy physical gold as an addition to their investment. Where is the gold price heading in the larger picture? Daniel Rauch does not provide a crystal-clear statement on this subject. But his statement is at least clear that the mechanism that we have been accompanying with current articles for months should continue to work. If investors become more willing to take risks and buy stocks in the short term, for example, the gold price falls – and vice versa (Risk On Risk Off Trades). We can also see from Rauch’s statements that interest rates should remain low in the long term. As a result, gold will basically retain its attractiveness. Even if clear statements with price targets for gold are missing, the following interview with Markus Koch over 14 minutes is still interesting.