It’s time for updates, given the difficult time I will give an overview of the gold and performance of the world economy.
A while ago I had recommended gold’s purchase, I was not wrong and the markets proved me right, it was quite predictable an increase, but as always Wall Street reserves us surprises.
Gold in a year has risen by 30%, some analysts say it will rise to 2000 dollars, others argue in the event of a financial crash a target price of 3000 dollars. These are important numbers, personally I closed the positions in profit and now I prefer to wait for several reasons.
I have to assess pandemic’s evolution in the world, the quarterly results of some American companies and the policy of central banks. In just a few months, central banks have injected 6000 billion to deal with the crisis caused by Covid 19, unemployment in the US alone counts 50 million without calculating how many will lose their jobs in the world.
Look at big brands like Zara, H&M how many stores have closed, giants like Pizza Hut, Dentix and Herz have filed for bankruptcy after the fierce lockdown, not that budgets were better before, but Covid 19 has accelerated Chapter 11.
Several companies and banks are considering strategic mergers also because in the future there will be no place for everyone, more and more Big Tech (Amazon, Google, Apple, Facebook, Microsoft) will dictate the pace.
Gold is for many a safe haven to preserve a part of the capital, until recently I indicated that I had a 10% invested in Etf or funds, now I recommend to decrease to 5%, with the remaining you could buy coins or gold bars.
Central banks are “drugging” financial markets to support the economy, I think we will have a long period of recession and uncertainty, once we assess the damage from the Covid 19 we can make more accurate predictions.
Someone will ask me, what should I do or where should I put my money? For those who want to invest in gold, here are some ISIN Etf/funds:
LU0568608433 LU0503254152 LU0496367920 LU0345780521 GB00B00FHZ82
For those (like me) trade with the options I recommend to buy Put even if the market has gone against (closed 3 trades at a loss). Look at the CBOE SKEW chart indicating the price of OTM Put (they are used for coverage or speculation), this makes me think that we are in an excess of bull market.
The options usually anticipate what will happen, it is true that with the injection of money of the Fed the numbers do not return, but if you look at the charts of Skew, Vvix and Put/Call ratio, I think before or after markets will correct.
Monitor gold and volatility.