To the dollar and to gold they like to play on the seesaw frequently. Therefore, these days, as the american currency it gets weak, the price of metal gets stronger. This represents an opportunity for those who know and want to capitalize on it and there are several keys to take into account regarding this dynamic and how to take advantage of it from Argentina, according to analysts. What are they and how to read them?
Key 1: Inflation and rates in the US
The first of these, according to the economist Federico Glustein, is related to the Federal Reserve (Fed) rate“which prompted reserve value to an asset that has temporal consistency in terms of its economic value and that, in the short term, can be established again as coin pattern”.
That is why the downward trend in the dollar reflects a slowdown in the inflationary trend in the United States, which could result in a brake on the aggressive policy of rates that the Federal Reserve has been carrying out. In this context, the dollar, which had been greatly invigorated in the world.
Likewise, from Epyca Consultores, the economist Joel Lupieri mentions that “one of the main drivers of the day were the comments of the European Central Bankwhich could not secure a decision to raise rates next week”.
Key 2: the displacement of the dollar
That generated a drop in bond yields, the product of a greater stimulus to look for stores of value. And, as Lupieri mentions, the gold is always considered an asset that allows safeguard wealth in moments of uncertainty, such as the present.
In that context, the gold is strengthened as store of value and, consequently, Glustein refers to the announcement made by the BRICS group, to which Argentina aspires to join, which announced that will launch a gold-backed common currency. “It is a tempting proposition on a global level to displace the dollar as the global axis of trade and stability”, points out the economist.
And he points out that, “the fact that, after having touched a price floor in September and October, that it is at peaks in its value at the moment is a sign of its economic flexibilityits scarcity and its relative weight in contexts of uncertainty”.
In this way, Glustein indicates that the combination of the inflationary decline in the United States with a brake on interest rate rises by the Fed is a key variable that counts to create a scenario in which, according to his forecast, “the metal will be most demanded and, therefore, its price trajectory will be upwards”.
Key 3: gold recovers value as an investment
Thus, for Lupieri, gold could be a good alternative at the moment for some local investors, “given that it is an intuitive and tangible product.” And he points out that gold bars are widely used as savings in Argentina.
Glustein agrees with this vision, although he clarifies that it is about “a long term investment and that it is not accessible to all actors”. And, in this sense, he points out that a viable alternative that he mentions is to bet on the cedears of mining companies or to do it through an exchange-traded fund (ETFs), which are a kind of “basket” of financial assets, like a mutual fund. “These can be a valid channel to interpret an investment with less capital,” says Glustein.
Another possibility is to buy the cedears (shares of companies from other countries listed on the local stock market) from gold mining companies or from a supplier to the sector, which will appreciate if the value of the metal rises or the associated industry grows.
There are also gold futures contracts for MatbaRofex, what They allow you to enter and exit in pesos in a contract for one ounce of dollarized gold.
In Argentina there are also some brokerage houses that offer Common Investment Funds (FCI) tied to the brightest metal.
And finally there are the cryptocurrencies tied to gold, which fall into the category of stablecoins and are a safer option than other assets in the crypto world. They are similar to gold funds and some of them are Pax Gold, Gold Mint or Tiberius (which is actually a mix of precious metals).
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
