Table of contents
Stay informed about everything you need to know about investing
Dear reader, welcome to the latest GoldRepublic newsletter! In just five minutes, we will fully inform you of the current precious metal rates and the most relevant news that affects your investment in precious metals. Don't miss out on these valuable insights!
Do you want to build up wealth in gold, silver or platinum in a structured way? With the GoldRepublic savings plan precious metal is automatically purchased and added to your portfolio, exactly at the frequency that suits you.
You choose how often you want to invest: monthly, biweekly or weekly. This way, you can spread your purchases over time and reduce the impact of price fluctuations without having to actively monitor the market.
The savings plan is fully flexible. You can change, pause, or stop your deposit at any time. In addition, you will benefit from a 50% discount on transaction costs when using the savings plan.
Your precious metal is physically stored in professionally secured and fully insured vaults in Zurich, Frankfurt or Amsterdam. This is how you build up wealth step by step in a tangible asset, outside the traditional financial system.
You can save from €50 per period. Note: savings plans are currently only possible with storage in Zurich. The discount on transaction costs only applies to the purchase.
This week, the financial markets were once again marked by the Iran war, questionable interest rate decisions by major central banks and strong quarterly results from the US tech giants.
For now, the Iran war is primarily a negative catalyst for the gold price. Since the start of the conflict, gold has fallen by around 15 percent. There are at least two reasons for this:
So you could say that the past few months have brought an unfortunate coincidence for gold. Now, the tide seems to be turning gently and the price of gold is starting to form a floor that could possibly serve as a foundation for a new upward phase.
An important reason for renewed optimism about gold is that real interest rates are starting to fall.
That sounds technical, but the mechanism is simple. The real interest rate is the interest rate on government bonds adjusted for inflation. Assume that a U.S. government bond yields 4 percent, while inflation rises to 5 percent. Then your real return is not positive, but negative. Despite that interest payment, your purchasing power is declining.
That's where it gets interesting for gold. Because of the war, energy prices are rising and inflationary pressure is rising. Normally, central banks could respond to this with interest rate hikes. Now, however, we see that central banks are afraid to do that, because the same war also makes the economy more vulnerable. On Wednesday, for example, the US central bank decided not to raise interest rates.
As long as central banks are afraid to respond to rising inflation (expectations) with interest rate hikes, this is actually a form of monetary easing.
It will then be less attractive for investors to park capital in government bonds, because the remuneration after inflation becomes increasingly meager. This forces investors to take extra risks in order to still get a return, and gold usually benefits.
So while the Iran war created a stronger US dollar at the start of the conflict, that is now slowly beginning to reverse. Why? Because we see that central banks are afraid to respond with interest rate hikes for the time being, for fear of damaging the economy, and because it is unclear how long the conflict will last.
In addition to the interesting development in the field of real interest rates, this week was also marked by the quarterly results of a number of US tech giants.
They are currently an important support for the financial market. While the Iran war hangs over the world like a dark cloud of uncertainty, S&P 500 companies' profit margins have risen to an all-time record level of 13.4 percent.
Never before have the profit margins for US companies been so high. By the way, this success is not limited to the United States. Globally, stock market companies are exceeding analysts' expectations with their quarterly results.
From that perspective, the global economy is doing well. These are figures that give investors confidence, figures that stimulate the level of credit creation, and therefore also figures that provide a favorable basis for gold.
Gold is often seen as a safe haven and a kind of natural antithesis to stocks. The reality, however, is different. At times when real interest rates fall and more capital enters the financial system, for example because confidence in the economy increases due to strong business results, gold and stocks can rise together.
Although it is still too early to draw firm conclusions, the gold price clearly received support from an important technical zone in March. Both the 200-day price average (blue) and its exponential variant (red) acted as safety nets.
At the same time, the macroeconomic picture is therefore also starting to look slightly more favourable. Real interest rates are falling, which historically often supports gold. Nevertheless, the Iran war continues to cause uncertainty, because its course can have a major impact on inflation expectations, central banks and the dollar.
The upward trend in gold has therefore not automatically been broken by the price movements of the past few months. However, a higher bottom compared to March would significantly strengthen the technical picture. In doing so, gold would show that buyers dare to enter earlier and that the underlying trend is still intact.
Analysis of the gold market: how the Iran conflict and falling real interest rates affect gold and what this means for investors.
The latest updates, analysis and insights from precious metals and financial markets
Socials
