Topic: Gold Losing It's Shine? - page 7. (Read 6893 times)
Gold will never lose it's shine as this is oldest asset which is trusted by everyone throughout history.If you refer at recent collapse of price then I will say that was hype and was artificial raise in price.Gold will always decide the value of everything.This time when Gold's price will rise that when will be genuine and long term rise.
According to Mark O'Byrne of GoldCore, gold is slowly losing it's shine. And things like bitcoin and cryptocurrency are stealing the spotlight.
Wilfred Frost of CNBC:
Do you think markets are adequately pricing in the risks that are present around the world today, particularly in Europe and the gold price itself?
Mark O’Byrne of GoldCore:
No, I don’t think so. I think in light of the “Grexit”, which you just mentioned, and also the “Brexit” and the overall debt positions globally — we would have a concern that there is a global financial bubble with stock markets at all time record highs, bond markets at all time record highs.
Meanwhile, gold prices have traded sideways, as you said, for a long period of time. We have had a serious correction and we believe there is consolidation. It looks undervalued. At the same time it could go lower before it goes higher. I think technically there is a weakness there and I think there is support at $1140 so short-term there is weakness, quite possibly, but medium to long term the fundamentals look very sound.
Wilfred Frost of CNBC:
Do you think that’s because we have had a breakaway from the idea that gold remains a great hedge towards any risk that’s out there — whether that’s inflation, deflation or just big geopolitical crises or is it just because markets don’t understand that those risks are present and they are ignoring them?
Mark O’Byrne of GoldCore:
I think the latter…for the moment.
I think it’s very like the 2003 to 2006-2007 period. The imbalances were building up in the system – meanwhile stock markets kept gallivanting higher and gold was a very under-owned asset and there wasn’t an appreciation of gold as a safe haven asset.
I think you are right.. I think that perception of gold … it has fallen out of favour. Sentiment towards gold is as bad as we have seen it since the 2003/2004 period.
Bitcoin is the more sexy thing. People want to talk about bitcoin and anything with “bit” in the name seems to be doing very well.
Whereas gold is very much less sexy. It’s less on the radar because it has performed quite badly in the short term. But, I suppose past performance is no guarantee of future returns and you have to look at the long-term store of value characteristics of gold as a proven hedging instrument and safe haven asset… over the long term. Not in the short term, obviously.
Carolin Roth of CNBC:
Mark, there simply is no inflationary pressure… I don’t see why gold should be moving higher at all. We are in a disinflationary or low inflation world. I don’t see why gold should be moving past the $1200 level that we’ve been bumping around over the last couple of months. And then we’ve got a dollar that’s moving higher. It’s a bit of a rough patch for the dollar right now but it’s still moving higher. I don’t see why anything we are seeing in gold is more than a dead cat bounce, essentially…?
Mark O’Byrne of GoldCore:
You’re right — there [are] no inflationary pressures … right now.
The question is “is that inflation building up?” And I think it probably is.
At the same time gold is not just a hedge against inflation — it’s actually not a really a hedge against inflation per se, it’s more of a hedge against serious inflation and stagflation. It’s also a hedge against deflation.
So when you have a Lehman Brothers moment or a potential “Grexit” there is that significant counterparty risk. And gold — because it has no counterparty risk if you own the actually physical asset — it is actually a hedge against deflation as well.
There is a huge body of academic research that shows that.
Wilfred Frost of CNBC:
Do you think markets are adequately pricing in the risks that are present around the world today, particularly in Europe and the gold price itself?
Mark O’Byrne of GoldCore:
No, I don’t think so. I think in light of the “Grexit”, which you just mentioned, and also the “Brexit” and the overall debt positions globally — we would have a concern that there is a global financial bubble with stock markets at all time record highs, bond markets at all time record highs.
Meanwhile, gold prices have traded sideways, as you said, for a long period of time. We have had a serious correction and we believe there is consolidation. It looks undervalued. At the same time it could go lower before it goes higher. I think technically there is a weakness there and I think there is support at $1140 so short-term there is weakness, quite possibly, but medium to long term the fundamentals look very sound.
Wilfred Frost of CNBC:
Do you think that’s because we have had a breakaway from the idea that gold remains a great hedge towards any risk that’s out there — whether that’s inflation, deflation or just big geopolitical crises or is it just because markets don’t understand that those risks are present and they are ignoring them?
Mark O’Byrne of GoldCore:
I think the latter…for the moment.
I think it’s very like the 2003 to 2006-2007 period. The imbalances were building up in the system – meanwhile stock markets kept gallivanting higher and gold was a very under-owned asset and there wasn’t an appreciation of gold as a safe haven asset.
I think you are right.. I think that perception of gold … it has fallen out of favour. Sentiment towards gold is as bad as we have seen it since the 2003/2004 period.
Bitcoin is the more sexy thing. People want to talk about bitcoin and anything with “bit” in the name seems to be doing very well.
Whereas gold is very much less sexy. It’s less on the radar because it has performed quite badly in the short term. But, I suppose past performance is no guarantee of future returns and you have to look at the long-term store of value characteristics of gold as a proven hedging instrument and safe haven asset… over the long term. Not in the short term, obviously.
Carolin Roth of CNBC:
Mark, there simply is no inflationary pressure… I don’t see why gold should be moving higher at all. We are in a disinflationary or low inflation world. I don’t see why gold should be moving past the $1200 level that we’ve been bumping around over the last couple of months. And then we’ve got a dollar that’s moving higher. It’s a bit of a rough patch for the dollar right now but it’s still moving higher. I don’t see why anything we are seeing in gold is more than a dead cat bounce, essentially…?
Mark O’Byrne of GoldCore:
You’re right — there [are] no inflationary pressures … right now.
The question is “is that inflation building up?” And I think it probably is.
At the same time gold is not just a hedge against inflation — it’s actually not a really a hedge against inflation per se, it’s more of a hedge against serious inflation and stagflation. It’s also a hedge against deflation.
So when you have a Lehman Brothers moment or a potential “Grexit” there is that significant counterparty risk. And gold — because it has no counterparty risk if you own the actually physical asset — it is actually a hedge against deflation as well.
There is a huge body of academic research that shows that.
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