- Tail risks in the global economy are lower than they used to be. The world is not going to end;
- In spite of the QEs, inflation is going to remain low because growth is weak, and therefore all this extra money is going into the reserves of the banks, as velocity is collapsing. If anything, inflation is now falling both in emerging and advanced economies. So buying gold as a hedge against inflation, in spite of all these QEs, is not a good investment;
- There is a global economic recovery. There are now other assets that provide both an income and a capital gain – from equities to even real estate – while gold has always been a play on capital appreciation;
- Real interest rates became very negative in the US and globally. So at current levels, they can only go higher rather than lower because there is a strong relation in gold prices and real interest rates. However, slow as the normalization by the Fed is going to be, eventually there will be one, and the real rates are going to hurt things like gold;
- In a world where other advanced economies are weak and emerging markets are soft, the Dollar may tend to appreciate, affecting the Dollar prices of commodities, including gold.
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