23 Mar 2015
Recent events in Europe bullish for Gold – Sunshine Profits
FXStreet (Barcelona) - Arkadiusz Sieroń of Sunshine Profits, explains that the possibility of Euro decline and the ongoing negative rate scenario is bullish for the saven haven asset Gold.
Key Quotes
“Negative deposit rates also impose some costs on banks, which may lower their profitability and even aggravate the problem of sluggish lending. Another important effect is the increase of a relative attractiveness of investing in alternatives, such as gold or Treasury bonds.”
“This is exactly what we are seeing right now. According to Bloomberg, in Switzerland, “investors are buying more gold as an alternative to hold Swiss franc cash deposits”.”
“Investors are eager to pay for holding safe assets, because they fear the collapse of the euro. You can think about such a deal as a currency playing or buying an option. Investors pay the premium, but when the Eurozone breaks up, they would hold gold, Swiss francs or bonds of the relative rich and stable northern countries like Germany, Denmark or Finland.”
“The recent events in Europe seem to be bullish for the gold market. The Eurozone crisis will come sooner or later. Investors predict rather sooner, at least drawing conclusions on the basis of the level of yields on Treasuries.”
“The central banks introducing negative interest rates and implementing quantitative easing (the Riksbank and the ECB), show that a global slowdown is on the horizon.”
“As we constantly repeat, gold is historically the best asset class during slowdowns. The safe haven demand (remember that the Swiss franc, which is traditionally considered as a safe haven currency, is now relatively less attractive) and very low real interest rates would also positively contribute to the prices of gold.”
Key Quotes
“Negative deposit rates also impose some costs on banks, which may lower their profitability and even aggravate the problem of sluggish lending. Another important effect is the increase of a relative attractiveness of investing in alternatives, such as gold or Treasury bonds.”
“This is exactly what we are seeing right now. According to Bloomberg, in Switzerland, “investors are buying more gold as an alternative to hold Swiss franc cash deposits”.”
“Investors are eager to pay for holding safe assets, because they fear the collapse of the euro. You can think about such a deal as a currency playing or buying an option. Investors pay the premium, but when the Eurozone breaks up, they would hold gold, Swiss francs or bonds of the relative rich and stable northern countries like Germany, Denmark or Finland.”
“The recent events in Europe seem to be bullish for the gold market. The Eurozone crisis will come sooner or later. Investors predict rather sooner, at least drawing conclusions on the basis of the level of yields on Treasuries.”
“The central banks introducing negative interest rates and implementing quantitative easing (the Riksbank and the ECB), show that a global slowdown is on the horizon.”
“As we constantly repeat, gold is historically the best asset class during slowdowns. The safe haven demand (remember that the Swiss franc, which is traditionally considered as a safe haven currency, is now relatively less attractive) and very low real interest rates would also positively contribute to the prices of gold.”