Gold rediscovered as the oldest asset class

Sometimes things happen fast and even faster than you think. The gold price in USD has broken its all-time high from 2011. The old investment lady is quite convincing in 2020. So far this year, gold has even outperformed the well-trained US technology stocks on the stock market. The price of the precious metal has been rising in various currencies for some years now, which in our view suggests that gold is certainly living up to its reputation as a currency alternative. Now the magical USD 2,000 mark is on the gold agenda.

The Corona crisis has abruptly turned the (financial) world upside down and shaken it up once. Although the waves on the capital market have calmed down again, political and economic uncertainties remain very high. In view of the rising number of new infections in the USA, a second wave of infections cannot be ruled out. To cushion the economic impact of the pandemic, the central banks have opened their monetary floodgates wide. The extensive fiscal measures that have been introduced are also intended to stabilize the economy again. As these measures are not entirely without risk, at least in the long term, investors are heading for gold as a safe haven. Gold ETF investors alone have increased their demand in the year to date by 741 tonnes, which is far higher than the previous year's figure (648 tonnes).

Investment demand more than compensates for the limited demand from jewellers and central banks. In addition, some mining companies temporarily halted production due to lockdowns. We therefore consider a deficit in the gold market for 2020/21 to be likely. The summer slump that we have forecast so far will not materialise. We have slightly adjusted the forecast profile and see the gold price already at over USD 2,000 by the end of the year. In 2021, the gold price will be somewhat "lighter" due to the recovery of the global economy. We therefore confirm our 12M forecast of USD 1,900.