Gold, quo vadis? Some expert opinions
News Arnulf Hinkel, financial journalist – 03.12.2018
Europe's largest precious metals fair, the International Precious Metals and Commodities Fair, was held in Munich from 9 to 10 November 2018. In addition to around 200 exhibitors and renowned speakers, private and institutional investors as well as representatives of mining companies also exchanged views on all kinds of aspects of gold. Some of the expert opinions were filmed and published by Benjamin Summa, Head of Communications at pro-aurum tv.
"Gold acts as an anti-bubble"
Gold expert Ronald Stöferle from the asset management company Incrementum AG believes that the gold price reached its lowest point in August 2018, regarding both market sentiment and futures market positioning. At that time, the level of pessimism was higher than in the last 20 to 30 years. Stöferle takes the fact that gold has reacted strongly to the downturn of the stock markets as a very positive sign, especially since gold mining stocks have held up well, while at the same time bonds saw hardly any inflows. He sees gold fully confirmed in its role as a reliable portfolio stabilizer, and describes it as an "anti-bubble": in his eyes, the precious metal, unlike many financial stocks, is very far from its all-time highs.
"Financial bets on gold are responsible for distortions"
Dirk Müller from the financial news provider cashkurs.com emphasises the long-term intrinsic value of gold and attributes the recurring distortions to the fact that the gold price depends not only on physical gold, but even more so on forward trades with futures contracts, making for a multiple of the trading of physical gold. Folker Hellmeyer, chief analyst at Solvecon Invest, points out further reasons that speak for gold investments in the current environment, as the "dollar system is weakening on a daily basis since the trade flows of an increasing number of countries are gaining independence from the dollar". Also, he is convinced that gold will benefit as a currency anchor: "Gold is under no obligation to any companies or states and, unlike currencies, has an intrinsic value. Therefore, it cannot be debased." Financial expert Claus Vogt, co-editor of "Der Börsenbrief", argues that global debt, especially for companies, has increased since the financial crisis in 2008, and that instability risks are now higher than ever before. This is why gold remains important.