Good news for all the gold bugs: the gold price can go up again! The most important reason is the quantitative easing policy of the European Central Bank. That is the opinion of the head of investments at wealth management firm Optimix. This company got back into gold as well with a part of its portfolio.
The gold price has a negative correlation with real interest rates. The fact that the European Central Bank decided to keep interest rates low, raise inflation expectations and weaken the euro, all works in favor of gold and a potential rise of the yellow precious metal.
Why The Gold Price Will Go Up
Optimix got out of gold in 2013 after it got in around 2008. Meanwhile they started to invest in physical gold and precious metals again. Handing the money over to banks to keep an eye on it, is very costly in many countries. Next to that it only takes a few people that decide that keeping your money in gold is a better idea to push the price of the precious metal up.
Optimix has become less positive on the stock market. One of the steps the company took to manage its risk is to buy bonds in Danish Krone, immediately after the Swiss National Bank decoupled the Swiss Franc from the euro. Furthermore, the party is quite positive on the Norwegian Krone and the country’s bonds.
Part of the unrest that arose among experts around the stock market was related to the fact that the correlation between different investment categories had strongly increased lately. Moen mentioned that spreading your risk has become increasingly difficult, much more than a few years ago. It is also one of the reasons that Moen invested in gold.
