The performance of the gold price in the current year is rather disappointing for investors. But commodity experts such as the U.S. Jim Rogers are certain that gold will soon be given new opportunities and will live up to its reputation as a “safe haven”.
Is inflation actually only temporary?
Inflation is on the rise worldwide. The inflation rate in the USA is already more than five percent, and Europe is also experiencing rising inflation figures of more than 3.5 percent. The central banks are still on a calming course and keep reiterating that inflation everywhere is only temporarily so high.
Despite the reassuring and optimistic tone of the central banks, there are some facts that speak for the opposite and suggest that the high inflation rate might not be just a short-term phenomenon after all.
Prices worldwide have been rising continuously for a good 24 months due to the Corona pandemic. Companies have to deal with higher costs due to the general price increase of raw materials and problems with supply chains and in production, and they pass these on to consumers.
In addition, real estate prices and rental costs are among the biggest price drivers, with an increase of more than 10 percent. In the future, the expected costs of climate policy are also likely to be among the major price drivers.
Positive signs for the development of the gold price
Currently, all these facts play a subordinate role for the price development of gold. At around minus 7 percent, the gold price has actually declined in the current year. However, gold production has also been declining since 2019. Higher demand would therefore be met with low supply.
The situation has clearly improved for many gold companies as well. Many have taken advantage of the time and can now produce more cost-effectively and efficiently, so investors can expect higher dividend payments in the future.
Commodities expert advises to invest in gold – but not yet immediately
The US American Jim Rogers is considered the old master of commodity investing. For many years now, his market assessments and investment tips have been in demand among experts and investors, and the 79-year-old’s success shows that he is usually right with his forecasts.
Although Rogers currently sees the greater potential in silver, the commodities expert continues to advise gold investments as a hedge against inflation – but not yet immediately.
The expert believes that the prices of gold and silver will correct for quite a while and continue to fall for a while. Only then does Rogers advise getting in and concedes that he himself will then also get back into gold trading.
Despite the disappointing performance of the gold price, gold has lost none of its appeal and is still a safe haven in times of inflation. But finding the right entry into gold trading still requires a bit of intuition for the right moment.