Global investors predict large-scale consequences for the economy due to trade wars and soft monetary policy, until the onset of another global economic crisis. Therefore, some of them buy physical gold, while others bet on it, expecting a sharp rise in the exchange rate.
Thus, according to a Bloomberg news agency, last Wednesday an unknown trader purchased 5,000 options worth $ 1.75 million on the New York Stock Exchange, the profit from which could be obtained if the gold exchange rate exceeded by June 2021 mark of 4000 dollars per ounce.
Tai Wong, the head of precious metals derivatives trading at BMO Capital Markets, said the following about the news: “You can compare this rate with an 18-month life insurance policy; traders want to protect themselves from the escalation of geopolitical and economic conflicts by bailing out money due to a sharp jump in prices for precious metals in such conditions. Buyers of these options clearly believe that something extraordinary will happen. ”
Recall that the absolute record for the gold exchange rate is the mark of 1923 dollars per ounce, which was reached in 2011, when the US Federal Reserve decided to buy assets worth more than 2 trillion. dollars to support the country's economy.
As you know, last week traders at one of the world's largest hedge funds Bridgewater Associates bought about $ 1.5 billion in options for sale, putting the American (S&P 500) and European (EuroStoxx 50) indexes on the collapse by March next of the year. This news can be considered a prerequisite for a bold bet on gold options: taking into account the fact that yellow precious metal is a countercyclical asset - the instability in the market of traditional investment objects will increase the demand for “yellow metal”.
Of course, a bid of $ 4,000 per ounce involves not only a collapse on the stock exchanges, but also large-scale geo-economic and political events: the global economic crisis and / or war.
Not surprisingly, gold has attracted the attention of investors recently. Its rate has grown by + 14% since the beginning of the year amid a softening of the monetary policy of the leading Central banks of developed countries, as well as trade wars (up to the 2011 record, another 24% is not enough). In such circumstances, developing countries continue to de-dollarize their reserves. Their central banks are buying yellow precious metals at a rapid pace. Turkey and some countries of Eastern Europe have joined Russia and China, which occupy leading positions in this gold rush.
For a long time it was believed that the Central banks of developed Western countries have a negative attitude to precious metals, but now they are in a hurry to repatriate their gold reserves from abroad, and this indicates preparations for truly harsh economic times. The global economic crisis, along with the consequences of dedollarization, can further undermine the credibility of the global currency - the dollar. In this case, panic, unrest and escalation of conflicts will not take long, which will make the rise in the gold exchange rate to $ 4,000 per ounce quite possible.