The investor's safe haven can be found in precious metals as the markets cough.

• Market Insider: Rising inflation drives retail investors towards gold.
• Invezz: Gold is becoming increasingly popular as the markets cough.
• The Economic Times: Jim Rogers reveals the safest investment for the next 2–3 years.

Market Insider: Rising inflation drives private investors towards gold

The current strength of the dollar does not convince retail investors, who trust in the bull market for gold. The European Retail Investor Index (SERIX) from Spectrum is at 116 for gold, the highest ever in the index's history. This indicates strong confidence in gold bars. A SERIX value above one hundred signifies an optimistic outlook, while scores below that indicate expectations of a bear market.

Historically, the relationship between gold and the dollar has been inverse, but this connection seems to have broken in the current macroeconomic situation dominated by rising global inflation and uncertainty. Although the dollar index has risen nearly 7% this year, investors have been cautious and have taken advantage of the lower gold price in May to protect their portfolios against inflation.

The fear of recession is not entirely unfounded, considering the Fed's multiple hikes in the general interest rate and the World Bank's new forecast for economic growth this year, which has dropped to 2.9% from the previous 4.1%. Gold benefits from this in the long term, and its value rose close to record levels, exceeding $2,000/oz when Russia invaded Ukraine, causing a sharp increase in commodity prices.

The article was originally written by Zara Tayeb for Insider on June 8, 2022.

Invezz: Gold is becoming increasingly popular as the markets struggle

Physical gold has meant the same thing as money for millennia. During the current economic turmoil, it can be a safe haven that people are seeking. The value of almost every "ordinary citizen's" assets has eroded due to many "once-in-a-lifetime" events. Households are more vulnerable than they have been in a long time.

The U.S. Federal Reserve's corrective action caused the markets to adjust their direction only momentarily; the Fed's historic 75 basis point hike did little to alleviate the growing price pressures. The prices of essential goods are at a multi-decade high. Households should prepare for ongoing economic difficulties, as inflationary pressures show no signs of easing.

Gold has nevertheless, or precisely because of this, maintained its value and performed significantly better than other assets. In the paper gold markets, trading occurs in futures, which are separate from the physical gold markets. There, physical gold often does not even move when future gold deliveries are traded. Since paper gold merely represents the actual metal, its quantity in the markets can be much greater than the actual gold reserves. Therefore, its market volatility is higher and it follows its own logic rather than the law of supply and demand.

This volatility of paper gold also calls into question the reliability of paper gold. According to statistics, however, the average consumer still trusts physical gold. Its purchases have increased significantly over the past three years, following inflation. Economic authorities cannot create gold out of thin air – unlike fiat currencies – and it is counterparty risk-free, as its value does not depend on future cash flows. In the current climate of uncertainty, it has thus become an important means of preserving value.

Four important factors support the position of physical gold in the investment portfolio:

1. The Fed's actions after 2019 give the impression that the economy would not withstand a return to normal monetary policy.
2. Due to issues in supply chains, it is uncertain when and how effectively the supply side can alleviate inflation and prevent the development of stagflation.
3. If the value of investment portfolios continues to erode, physical gold may help ease the distress of economies.
4. Current forecasts for total gold sales in 2022 are nearly ten times higher than in 2019, but this has not yet been reflected in the price of paper gold.

In theory, the Fed's 75 basis point hike would be detrimental to the value of gold, but the price of paper gold remains high. The Fed may implement another 75 basis point increase, so metal investors have good reason to monitor the price development of physical gold.

The article was originally written by Shivam Kaushikat Invezz. 17.6.2022

The Economic Times: Jim Rogers reveals the safest investment opportunities

There are no safe investment options, states Jim Rogers, an American investor and economic commentator in the article. According to Rogers, inflation is influenced by the pandemic and war, but inflation has worsened primarily due to the central banks' inability: bankers are primarily concerned about their own jobs and exacerbate the situation by printing new money.

According to Rogers, it is not worthwhile to search for a safe place to invest. Instead, it is better to choose an asset that is currently the least risky for the next two or three years: silver and possibly also agriculture. He plans to continue monitoring the situation himself, as "a major collapse pulls everything down." Rogers advises investors to be vigilant and prepare for stormy times.

The article was originally published in The Economic Times on June 15, 2022.

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