Global View March 2016: Why Gold Bullion is Soaring

Gold is our high conviction trade for 2016. Think of the gold price as the antithesis of paper money. A strong gold price equates to weak paper money: this often means a falling US dollar, but not always. The last couple of years have seen gold reaching record levels measured in EM currencies, but still languishing against the US unit. However, the next 18 months may see an unambiguously strong gold price against all paper units. We expect it to test US$2,000/oz. by mid-2017. The reasons lie in the changing mix of Global Liquidity.