Gold falls to $ 1,000 or even lower. That seems to be a foregone conclusion. In any case, the articles are piling up in this regard. The arguments are clear: there is a sell-off, there is a risk of deflation. Virtually all asset classes are devalued. Cash is king. For this reason, the US dollar is rising in a zero interest rate environment. There is also a liquidity crisis. Corona paralyzes all life – both social and economic. So far so good.
“Well, I don’t want to give you false hopes at this point. And of course this worst case scenario can occur. It all sounds logical. Believe me: In times of crisis, all negative arguments sound logical. As in bull phases, all positive arguments sound logical. That’s why stocks on the top always appear cheap and expensive on the ground. On the one hand, too much optimism is priced in, on the other hand, too much pessimism. A little more realism would do everyone good.”
Gold is currently trading in the lows of November last year. And even if many are sure that from now on things will only go downhill (as it should only go uphill two weeks ago), this is a very extensive correction wave from a technical point of view. Ideally, the area holds around $ 1,450. The market is currently pricing in worst case scenarios. But what if there are first treatment successes? What if the number of newly infected people declines in a few weeks?