Gold Will Outperform Crypto As An lnflation Hedge

1. Gold Will Outperform Crypto As An
Inflation Hedge

2. Points To Be Discussed Today:
• Gold Is Undervalued
• Goldilocks Scenario
• Bank Sees Gold Hitting As High
• Gold May Be A Good Strategic Purchase
• Overall Outlook For Gold Is Still Strong
• The Gold Price Going Forward
• Note: Data is according 6 July 2021, 5 & 10
Aug 2021

3. Gold Is Undervalued
• Gold is undervalued and has up to 38%
potential upside if the economy slows,
Goldman Sachs said in its note.
• The bank expects gold to serve as a better
inflation hedge than cryptocurrencies, the
note said.
• "Overall we see crypto still far from
becoming a defensive long-term store of
value like gold," Goldman said.

4. Goldilocks Scenario
• At about $1,800 per ounce, the current price of
gold is pricing in a "goldilocks scenario" of
moderate inflation and a continued global
economic recovery from the COVID-19 pandemic,
Goldman Sachs said in a Tuesday note.
• But if inflation sees a higher than expected surge,
or if the global economic recovery falters, there is
significant upside to the price of gold, according
to Goldman.

5. Goldilocks Scenario - I
• "In a scenario where the global economic
recovery does not play out as expected or
inflation begins to move materially above
expectations.
• We see material upside to gold given its
undervaluation and low allocation from the
investment community," Goldman said.

6. Bank Sees Gold Hitting As High
• The bank sees gold hitting as high as $2,500,
representing 38% upside potential from
current levels in the event that US investors'
allocation to gold ETFs rises to its 2011 peak of
0.7% of their portfolio.
• Given the significant upside, Goldman views
gold as a "good strategic purchase" for
investment managers that want to hedge
against tail risks.

7. The Potential Upside In Gold
• Adding to the potential upside in gold is if the
Fed under-reacts to rising inflation and a
slowing global economy.
• This scenario would drive investors to more
defensive assets, according to Goldman.
• "In our view, this implies gold can outperform
cryptocurrencies, which we view as more risk-
on inflation hedges.

8. Goldman Only Sees Gold Hitting
• Overall we see crypto still far from becoming a
defensive long-term store of value like gold,"
Goldman said.
• But if the global economic recovery continues
to hum along and inflation remains moderate,
Goldman only sees gold hitting $2,000,
representing potential upside of 10% from
current levels.
• The price of gold is down 4% year-to-date.

9. Gold May Be A Good Strategic
Purchase
• "Ultimately, a number of uncertainties
are still hanging over the global economy.
• Therefore, gold may be a good strategic
purchase for portfolio managers looking
to hedge against tail risks of macro
volatility," Goldman concluded.

10. XAU/USD To Gain Bullish Traction On
A Break Above $1834
• Gold is holding steady just above the
$1791.45/$1790.85 mid to late July lows.
• Axel Rudolph, Senior FICC Technical Analyst at
Commerzbank , maintains a bullish bias as the
yellow metal remains above the 2019-2021
uptrend line at $1752 but warrants some
caution.

11. XAU/USD Sidelined Near-term Above
$1791.45
• “Gold really needs to overcome the $1834.16
mid-July high to regenerate upside interest and at
current levels we are relatively neutral.”
• “The daily Elliott wave count remains negative
and below $1790 w
• ill target the $1752 2019-2021 uptrend line.
While above there we will retain our longer term
upside bias, however the lack of a sustained
bounce is worrying.”

12. XAU/USD Sidelined Near-term Above
$1791.45 - I
• “Above $1834.16 lies the $1857.25 4th June low.
This guards the June high at $1916.91 and Fibo at
$1921.”
• “Longer-term, we still target the $1959/65
November 2020 high and the 2021 high. These
guard the $1989/78.6% retracement and the
2072 2020 peak.”
• “The 78.6% retracement lies at $1728.90 and
only below here will target the
$1677.73/$1676.80 lows seen in March.”

13. Gold Price Dropped
• The gold price dropped but these experts
reckon the long-term outlook is still
strong.
• The spot gold price dropped to
US$1,733.86 an ounce yesterday – –
that’s a drop of around $30 an ounce or
1.70% – after the US reported strong
labor force figures.

14. Overall Outlook For Gold Is Still
Strong
• But the overall outlook for gold is still strong
according to Minelife founding director and
senior research analyst Gavin Wendt who said
the catalyst for the “mid-cycle correction” is
already ancient history.
• “My fundamental view on gold is that the outlook
is still robust, it is still strong, and the reason is
that we have debt levels that are extraordinarily
high in the world’s major economies, that debt
has to be serviced and that level of debt is
growing,” he said.

15. The Near-term Correction In The Gold
Price
• “At the same time, we’ve got uncertainty with
respect to the impact of COVID variants on the
world economy, and the US economy in
particular.
• “And whilst we’ve seeing strong labor force
figures – which seems to have been the
catalyst for the near-term correction in the
gold price – that’s effectively ancient history.

16. The Near-term Correction In The Gold
Price - I
• “We’re charging forward, with the
infrastructure spending that’s going to come
by Biden economically everything’s going to
be great – so why do we need gold?”
• “But in the current environment any sort of
economic data, particularly in the age of
COVID is extremely volatile, it can move
around, and it can correct itself very quickly.”

17. The Outlook For The Gold Price
• “If you look at things like yields in the United
States, they’re at a record low level, they’re
negative now and to me that is a very strong
indicator and a very positive fact in terms of
the outlook for the gold price,” Wendt said.
• “One of the things we’re also looking at in the
United States is interest rates which are pretty
close to historical lows.

18. Positive Catalyst For The Gold Price
• “At the same time, we’ve got inflation and
that means that interest rates in the United
States are negative.
• “Once interest rates in the US are below the
level of inflation that’s negative real interest
rates – and typically when interest rates are
negative like that, it’s a very positive catalyst
for the gold price.”

19. The Gold Price Going Forward
• Wendt predicts that interest rates will stay low
and the US dollar will stay low, which provides
a fundamentally good environment for the
gold price going forward.
• “Markets will always look at these bits of
economic data as a justification for a positive
outlook, but beneath all of that, I think there’s
still a very, very strong argument for gold,” he
said.

20. Gold Will Outperform Crypto As An
Inflation Hedge

21. Thanks for listening
Gold Will Outperform Crypto As An
Inflation Hedge