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In Gold We Trust, 2020 – The Dawning of a Golden Decade
In Gold We Trust, 2020 – The Dawning of a Golden Decade
The New In Gold We Trust Report is Here!
The In Gold We Trust 2020 report by our good friends Ronald Stoeferle and Mark Valek was released last week. It is the biggest and most comprehensive gold research report in the world. As always it contains a wealth of new material, as well as the traditional wide-ranging collection of charts and data that makes it such a valuable reference work for everything of interest to gold investors or indeed for anyone interested in precious metals (a download link to the report is provided below).
Left: casting gold bars. Right: using gold as a shield against assorted slings and arrows.
Here is a brief overview of the main subjects discussed in the report:
– A review of the most important events in the gold market in recent months
– An analysis of the impact of the Covid-19 crisis on the price of gold
– The increasing importance of gold in times of de-dollarization
– Silver – ready to fly high?
– Gold and cryptocurrencies
– Gold mining stocks: The bull market has started
– Outlook for the gold price development in this decade: A gold price of around USD 4,800 suggested by our quantitative model, even with a conservative calibration of the parameters.
As an aside, yours truly has also contributed a brief chapter to this year’s report, namely the chapter on capital consumption starting on page 192.
As this year’s IGWT report is published, gold has finally clearly reentered a bull market. Of course, with hindsight it is obvious that a bull market was underway ever since the mid-cycle correction ended in late 2015, but it was initially a very labored, halting affair, a “stealth” bull market if you will. And while gold may not yet be at a new all time high in US dollar terms, it has reached new highs in numerous other major currencies:
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Incrementum Inflation Signal Update – A Reversal To “Rising Inflation”
Incrementum Inflation Signal Update – A Reversal To “Rising Inflation”
Introductory Remarks by PT
We have discussed the proprietary Incrementum Inflation Indicator in these pages on previous occasions, but want to quickly summarize its salient features again. It is a purely market-based indicator, this is to say, its calculation is based exclusively on market prices and price ratios derived from market prices.
However, contrary to most measures of inflation expectations, the Incrementum Inflation Signal is not primarily focused on yield differentials, such as is e.g. the case with 5-year breakeven inflation rates.
The 5-year breakeven inflation rate is derived from the differential between 5-year treasury note yields and 5-year TIPS yields. Interestingly, it has recently begun to tick up as well after declining sharply for several months.
The Incrementum Inflation Indicator instead focuses on the prices of traditional inflation beneficiaries (several of them are mentioned below), many of which tend to lead CPI by a considerable margin.
The indicator has recently switched from “falling” to “rising inflation”, which has important implications for investors. Below follows the official announcement of the shift by our friends Mark J. Valek and Ronald-Peter Stoeferle, the co-managers of the Incrementum fund family.
The Incrementum Inflation Signal Reverses – by Mark J. Valek and Ronald-Peter Stoeferle
Growing Concerns About Economic Growth
As of the beginning of January, our proprietary inflation indicator has switched from “FALLING INFLATION” to a full blown “RISING INFLATION” signal.
The reversal was triggered by the latest development in the gold/silver-ratio, which has weakened from 87 to currently 83. Moreover, gold mining stocks (HUI) broke out vs. the broad equity market (SPX) and gold itself also switched to a long signal. Only the broad commodity market (BCOM) still shows a somewhat lackluster performance, but seems to be in the process of building a base as well.
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