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Special Report

In Gold We Trust Report 2019: Gold in the Age of Eroding Trust

Sprott is proud to be a sponsor of Incrementum's 13th edition of its annual In Gold We Trust report.

Key Takeaways

  • Trust is the basic value of interpersonal cooperation and the cement of our social order. The erosion of our “trust capital” can be observed in many areas of society.

  • The breakdown of trust in the international monetary order is manifesting itself in the highest gold purchases by central banks since 1971 and the ongoing trend to repatriate gold reserves.

  • Gold reaffirmed its portfolio position as a good diversifier as trust in the “Everything Bubble” was tested in Q4/2018. While equity markets suffered double-digit percentage losses, gold gained 8.1% and gold mining stocks 13.7%.

  • The normalization of monetary policy was abruptly halted by the stock market slump in Q4/2018. The “monetary U-turn” that we already forecasted last year has begun.

  • Recession risks are significantly higher than discounted by the market. In the event of a downturn, negative interest rates, a new round of QE, and the implementation of even more extreme monetary policy ideas (e.g. MMT) are to be expected.

  • When it comes to trust in investments, our vote is clear. Trust looks to the future, forms itself in the present, and feeds itself from the past. Gold can look back on a successful five-thousand-year history as sound money.

Ronald-Peter Stoeferle and Mark Valek, investment managers of the asset management company Incrementum AG in Liechtenstein, are the authors of the report. In Gold We Trust report is widely considered the “gold standard” in gold-related research.

More detailed information on the report can be accessed at https://ingoldwetrust.report/igwt/?lang=en.

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