The gold price was able to recover most of the losses it had accumulated during this week. But to jump into the positive range, at least with gold itself, the strength was lacking. The situation was different with gold mining stocks. After an initial minus of around four percent (measured by the GDX), these turned positive. George Gero, director at RBC Wealth Management, calls for a bargain hunt.
“Sales have triggered sales”
“Sales have triggered sales,” says George Gero. The sharp slump in Dow and gold at the start of trading would initially have fueled fears of a second wave of Corona – and of course with the associated renewed slump in the economy. This has led to fear sales. “Keep an eye out for bargain purchases at Gold should there be any other major setbacks,” advises Gero.
There is little to add. The Fed’s announcement yesterday evening that it wanted to start buying corporate bonds shows the means that are now being used to provide the economy with capital. One may discuss how long it takes for this flood of capital to cause currencies to depreciate. But from today’s perspective, it actually only seems to be a matter of time.Investors are currently discussing whether the markets are in a crash-up boom due to the flood of capital or are on the threshold of such a boom.