The Federal Reserve’s aggressive monetary policy stance has brought the US dollar to the highest level for more than twenty years. This damaged the commodity markets and the price of gold saw harsh decreases. However, despite the latest fluctuating, a fund manager says investors should still be extremely positioned at commodities. He also records that this position should be below half.
“The price of gold must actually be closer to $ 1,000!”
Robert Minter, the ETF Investment Strategy Director in ABRDN, says the price movement is impressive where the US dollar and bond returns are impressive, despite the 9 %decrease of gold this year. In addition, gold should be traded for $ 1,000 rather than $ 1,600. In this context, Minter makes the following statement:
It is surprising that the gold price is not lower. Investors find reasons to keep gold despite the US dollar and interest rates.
“They will return to gold when they see something broken!”
Minter adds that what holds the gold is all the investors waiting on the edge waiting for the global central bank policies to break the global economy. He says that after the first time the Central Bank of Japan was forced to intervene in the foreign exchange market for the first time since 1998, we can be at a breaking point.
Meanwhile, Kriptokoin.comAs you followed from the pound collapsed. The pound has fell to the lowest level since the mid -1980s against the US dollar. Therefore, many market analysts think that the Central Bank of the UK may have to support the currency.
However, Minter refers to the worsening of global economic conditions. Therefore, he states that it would be difficult for the Federal Reserve to maintain its aggressive monetary policy stance. From here, he makes the following assessment:
The federal reserve already made a policy error. We are waiting to see how bad the effect will be. Many people are waiting for something to break. When they see that they are broken, they will return to gold.
“All commodities suffer from low stocks”
With gold, the Minter rises in the wider commodity index. He adds that a tremendous supply and demand imbalance in commodities such as some metals, energy and agriculture will make them immune to a global recession. It is possible for a narrowing of the world economy to reduce the demand for raw commodity. Together, he argues that this is not enough to affect systemic supply problems. Minter explains his views as follows:
All commodities suffer from low stocks. Weak investment in future production means that these stocks will not be filled soon. Look at the aluminum, no aluminum anywhere in the world. This also applies to copper. It doesn’t matter where you look. There are supply restrictions all over the world.
