From stock exchange to goldmine?
February continued what started in January: after a small positive correction the markets started going south again and in mid-February they hit yet another nadir. In Germany the DAX index went below the August-September 2015 level. In our view the fear of economic recession might be a bit exaggerated. Although the loan conditions have worsened in developed countries and this has had a negative effect on economic growth, low oil and raw material prices, plus the strong US labour market all contribute to growth.
The chair of the FED intends to keep the base rate high but talks about loosening the monetary policy. This can lead to two outcomes: a new economic bubble that can burst any time or a higher inflation rate. In this volatile situation gold was one of the best investments early this year. What is more, after more than 4 years of going down and an 80-percent minus, the shares of noble metal mining companies finally performed even better than gold!
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