Gold is in a transition phase. In the past nine months two key developments—war and inflation—have made gold trade much stronger than how it was priced from 2006 through 2021. Both developments are likely to stick around in the coming years and will prove a tailwind for gold. Moreover, the current monetary environment is adding support to the gold market as governments and central banks risk insolvency. For the medium- and long-term I’m therefore optimistic on gold. In the short-term gold still has downside risk due to rising interest rates and the possibility of collapsing asset markets triggering a liquidation event.
Is the Gold Price at a Turning Point?
Gold is in a transition phase. In the past nine months two key developments—war and inflation—have made gold trade much stronger than how it was priced from 2006 through 2021. Both developments are likely to stick around in the coming years and will prove a tailwind for gold. Moreover, the current monetary environment is adding support to the gold market as governments and central banks risk insolvency. For the medium- and long-term I’m therefore optimistic on gold. In the short-term gold still has downside risk due to rising interest rates and the possibility of collapsing asset markets triggering a liquidation event.