Currently, most factors that potentially should lead, according to investment theory, to a significant increase in the price of gold like high money creation, huge outstanding money supply, political uncertainty and risk aversion are present and amplified.
And despite all that the price of gold cannot break significantly above 2000 USD.
I am of the opinion that one of the main factors, influences behind that development is Bitcoin and cryptocurrencies, in general.
Most of the global trading volumes in gold and silver occur on the spot market. Gold is traded electronically like a foreign currency, without physical delivery and the price is very close to troy ounce futures price.
The same way Bitcoin is traded.
Apparently, most of the retail investors in Bitcoin were investing previously in gold.
And these possible investment outflows out of the gold spot market towards Bitcoin and cryptocurrencies, seem to explain, at least partially, the gold price not exploding so far.
Disclaimer: The blog post above is not a recommendation to buy or sell securities, derivatives or cryptocurrencies.
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