The gold price was able to recover most of the losses it had accumulated during the day on the 15th of June. However, at least gold itself lacked the strength to jump into positive territory. 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 a renewed slump in the economy. This has led to sales of fear. “Keep an eye out for bargains on gold should there be any 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 devalue. 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. There is an escape into real assets such as shares, real estate or gold.