by Pater Tenebrarum, Acting Man:
The New In Gold We Trust Report is Here!
As announced in our latest gold market update last week, this year’s In Gold We Trust report by our good friends Ronald Stoeferle and Mark Valek has just been released. This is the biggest and most comprehensive gold research report in the world, and as always contains a wealth of interesting new material, as well as the traditional large collection of charts and data that makes it such a valuable reference work for gold investors.
To provide a brief overview of the contents, here is the press release that accompanied the publication – the report is available for download via a link further below.
Gold and the Turning of the Monetary Tides
The 12th edition of the annual In Gold we Trust report discusses three fundamental turning points affecting the global monetary system. The authors of the report Ronald- Peter Stoeferle and Mark Valek refer to these as “Monetary Turns of the Tide”:
The Federal Reserve has sounded the bell on a beginning turn of the tide in monetary policy: the start of a global rate hike cycle and particularly the reversal from “QE” to “QT” puts an end to a decade of flooding the markets with liquidity. The fact that the liquidity tide is going out marks the first time in ten years that financial markets are facing a real test.
A turn of the tide in the global monetary system, away from the US dollar-centric monetary order toward a multi-polar order increases the relevance of gold. Gold is beginning to play a more prominent role in the currency policy deliberations of central banks, above all as a result of growing geopolitical polarization, increasing over-indebtedness and the continuing process of “de-dollarization”.
A technological turn of the tide has occurred due to the proliferation of blockchain technology and the cryptocurrencies associated with it. These new technologies are offering a multitude of innovations as virtual means of payment and stores of value. In the meantime even gold-backed crypto-tokens have been successfully launched.
Another topic examined in this year’s In Gold we Trust report are inflationary tendencies. In the ongoing tug-of-war between inflationary and deflationary forces, inflationary forces appear to have gained the upper hand in the course of the past year. Since September 2017 our proprietary Incrementum Inflation Signal also indicates that price inflation is gathering pace.
After a period of intense creative destruction, precious metals mining stocks are once again attractive. In light of the currently extremely high level of the gold-silver ratio, excellent investment opportunities should become available in the stocks of primary silver producers, in particular once the trend in the ratio changes again.
Technical analysis by and large indicates that a positive set-up for gold is in in place. Sentiment on gold is pessimistic and there was a healthy adjustment in speculative positioning in the futures markets. The seasonally strongest period for the gold price begins in June.
This year’s edition of the In Gold we Trust report was presented at an international press conference in Vienna, Austria on May 29, 2018. Ronald-Peter Stoeferle and Mark Valek, investment managers of the asset management company Incrementum AG in Liechtenstein, are the authors of the report. Last year’s edition of the In Gold we Trust report was downloaded more than 1.7 million times and the report is widely considered the “gold standard” in gold-related research. Further information on the report and its authors can be accessed at www.ingoldwetrust.report.
On more than 200 pages, the authors analyze a wide variety of drivers affecting the gold price. This year’s edition of the report also contains two exclusive interviews: one with US-based analyst Luke Gromen (FFTT), in which he discusses the future of the US dollar. The other interview was conducted with Dr. Richard Zundritsch, the nephew of renowned Nobel Prize laureate Friedrich A. Hayek. He comments on Hayek’s proposal calling for competition between (privately issued) currencies. Due to the introduction of gold-backed cryptocurrencies, the idea has gained renewed topicality.
In the course of 2017 the price of gold rallied primarily in US dollar terms (+13.7%). It gained ground in almost every other currency as well (AUD, CAD, JPY, etc.). Only in euro terms did the gold price suffer a small decline of -1%. Since the beginning of 2018, the performance of gold in USD terms was to date slightly negative (-1.2%), while euro-based investors enjoyed a small gain of +0.6%. The recent low volatility of the gold price is quite remarkable. It has decreased to the lowest level in more than 10 years.