“Wednesday’s with Axel” Short Sighted (Quarter End) ….. GOLD

In our continued series of “Wednesday’s with Axel” from our Private Client Roundtable, where we discussed your great questions from the field, and many other world economic events, this week we discuss Gold, as the timing our meeting coincided with the end of the quarter.

End of the Quarter, So What?

Take a look at this chart. It is very easy to see when the most recent bottom was put in for the shiny metal of Gold. The end of the second quarter just so happens to also coincide. Coincidence?? We do not think so. There were many rumors of large money management firms not wanting to show they owned Gold at the end of the quarter.

Gold as a fear gauge

Axel casually stated that Gold’s movement often is associated with fear. Fear rises, gold up and visa versa. We agree and hold gold just for this diversification reason.

Gold as a defense mechanism, Inflation

Axel believes inflation is the way out as we reviewed in our Inflation/Deflation post. Inflation puts the jets under Gold and other real assets as its tangibility becomes more important during inflationary monetary declines.

Gold Forever

In closing, Axel said he thought Gold could and should be owned forever. In this point we disagree, while Gold looks like a good asset class at the current time, we never say forever!!

Have a Great Wednesday!

John Kvale