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Incrementum: "Preview Chartbook of the In Gold We Trust Report 2020."

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Incrementum: "Preview Chartbook of the In Gold We Trust Report 2020." by Ronald-Peter Stoeferle and Mark J. Valek March 2020.

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Incrementum: "Preview Chartbook of the In Gold We Trust Report 2020."

  1. 1. 1 Preview Chartbook of the In Gold We Trust Report 2020 Ronald-Peter Stoeferle Mark J. Valek March 2020
  2. 2. 2 In Our Partners We Trust
  3. 3. 3 The In Gold We Trust report 2020 will be published on May 27th! Subscribe by following the link: https://ingoldwetrust.report/igwt/?
  4. 4. 4 Executive Summary of the In Gold We Trust 2020 Preview Chartbook 1. Gold - What does the “7th sense of the financial markets” tell us? • Gold is trading at all time highs in many major currencies with an average rise of 9% in 2020 so far! 2. Recession - Despite numerous indications still a Black Swan? • Currently, we see the longest, but also the weakest economic expansion in the USA since 1945, which indicates an artificial maintenance of the economy! • The monetary U-turn is already happening with rapidly expanding balance sheets and panic rate cuts. 3. Inflation - The ultimate pain-trade? • In the last decades we underwent ever-weaker price inflation. This is prompting central bankers to take extreme measures. Even the raising of the inflation target from 2% to 4% is increasingly discussed among central bankers and economists! 4. Gold Mining Stocks - Gold up, gold stocks catching up? • Gold mining stocks have been performing excellent in the shadow of gold. However, the real breakout may still be pending in this promising environment for mining stocks! 5. Quo Vadis? - Will gold exceed its all time high in USD? • Low real interest rates and a rising amount of risk factors (corona crisis, trade war, US elections, etc.) play right into the hands of gold as a safe haven!
  5. 5. 5 1. Gold What does the “seventh sense of the financial markets” tell us? “Where gold speaks every tongue is silent.” Proverb
  6. 6. 6 Annual Gold Performance in Major Currencies Source: www.goldprice.org, Incrementum AG, prices per 04/03/2020 EUR USD GBP AUD CAD CNY JPY CHF INR Average 2001 8.1% 2.5% 5.4% 11.3% 8.8% 2.5% 17.4% 5.0% 5.8% 7.4% 2002 5.9% 24.7% 12.7% 13.5% 23.7% 24.8% 13.0% 3.9% 24.0% 16.2% 2003 -0.5% 19.6% 7.9% -10.5% -2.2% 19.5% 7.9% 7.0% 13.5% 6.9% 2004 -2.7% 5.3% -2.3% 1.8% -1.9% 5.3% 0.7% -3.4% 0.6% 0.5% 2005 36.8% 20.0% 33.0% 28.9% 15.4% 17.0% 37.6% 37.8% 24.2% 26.1% 2006 10.6% 23.0% 8.1% 13.7% 23.0% 19.1% 24.3% 14.1% 20.9% 17.2% 2007 18.4% 30.9% 29.2% 18.3% 12.1% 22.3% 22.9% 21.7% 16.5% 21.7% 2008 10.5% 5.6% 43.2% 31.3% 30.1% -2.4% -14.4% -0.1% 28.8% 15.5% 2009 20.7% 23.4% 12.7% -3.0% 5.9% 23.6% 26.8% 20.1% 19.3% 16.5% 2010 38.8% 29.5% 34.3% 13.5% 22.3% 24.9% 13.0% 16.7% 23.7% 25.2% 2011 14.2% 10.1% 10.5% 10.2% 13.5% 5.9% 4.5% 11.2% 31.1% 11.2% 2012 4.9% 7.0% 2.2% 5.4% 4.3% 6.2% 20.7% 4.2% 10.3% 7.5% 2013 -31.2% -28.3% -29.4% -16.2% -23.0% -30.2% -12.8% -30.1% -18.7% -24.1% 2014 12.1% -1.5% 5.0% 7.7% 7.9% 1.2% 12.3% 9.9% 0.8% 6.2% 2015 -0.3% -10.4% -5.2% 0.4% 7.5% -6.2% -10.1% -9.9% -5.9% -3.8% 2016 12.4% 9.1% 30.2% 10.5% 5.9% 16.8% 5.8% 10.8% 11.9% 12.3% 2017 -1.0% 13.6% 3.2% 4.6% 6.0% 6.4% 8.9% 8.1% 6.4% 6.3% 2018 2.7% -2.1% 3.8% 8.5% 6.3% 3.5% -4.7% -1.2% 6.6% 2.6% 2019 22.7% 18.9% 14.2% 19.3% 13.0% 20.3% 17.7% 17.1% 21.6% 18.3% 2020 ytd 8.8% 8.0% 11.4% 14.5% 11.3% 8.1% 6.8% 6.7% 11.5% 9.7% Average 9.6% 10.4% 11.5% 9.2% 9.5% 9.4% 9.9% 7.5% 12.6% 10.0%
  7. 7. 7 Gold Performance in Major Currencies (indexed 100 = 01/2009), 01/2009–02/2020 Source: Reuters Eikon, Incrementum AG 80 100 120 140 160 180 200 220 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 JPY EUR GBP CAD CNY USD CHF
  8. 8. 8 S&P 500/Gold Ratio, 01/2008–02/2020 Source: Reuters Eikon, Incrementum AG 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gold/S&P 500 ratio 90d MA 200d MA
  9. 9. 9 Dow/Gold Ratio (log), 01/1800–02/2020 0 1 10 100 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2020 Dow/Gold ratio ? 1913 Gold Standard Era Fiat Money Era Gold low Stocks high Gold high Stocks low Gold high Stocks low Gold low Stocks high Gold low Stocks high Gold low Stocks high Gold high Stocks low Gold high Stocks low 1971 Source: Nick Laird, goldchartsrus.com, Reuters Eikon, Incrementum AG
  10. 10. 10 Dow/Gold Ratio (log), 01/1800–02/2020 Source: Nick Laird, goldchartsrus, Reuters Eikon, Incrementum AG 0 1 10 100 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2020 Dow/Gold ratio A B C D E F G H I J K L M Period Date Stock Market (DJIA) Gold price Dow/Gold ratio Start End Start End Return Start End Return Start End A-B 02/1802 08/1835 3 23 599% 19 21 7% 0.2 1.1 B-C 08/1835 03/1842 23 6 -76% 21 21 0% 1.1 0.3 C-D 03/1842 01/1853 6 21 268% 21 21 0% 0.3 1.0 D-E 01/1853 10/1857 21 8 -62% 21 21 0% 1.0 0.4 E-F 10/1857 08/1863 8 26 220% 21 27 32% 0.4 0.9 F-G 08/1863 03/1865 26 21 -18% 27 53 95% 0.9 0.4 G-H 03/1865 08/1929 21 380 1,705% 53 21 -61% 0.4 18.4 H-I 08/1929 06/1932 380 43 -89% 21 21 0% 18.4 2.1 I-J 06/1932 01/1966 43 984 2,196% 21 36 72% 2.1 27.7 J-K 01/1966 01/1980 984 876 -11% 36 722 1,934% 27.7 1.2 K-L 01/1980 08/1999 876 10,829 1,136% 722 258 -64% 1.2 42.1 L-M 08/1999 08/2011 10,829 11,614 7% 258 1824 608% 42.1 6.3
  11. 11. 11 Dow Jones Industrial Average (lhs), and Dow/Gold Ratio (rhs), 07/2018– 02/2020 Source: Eric Pomboy, Meridian Macro Research LLC, Reuters Eikon, Incrementum AG 15 16 17 18 19 20 21 22 23 20 000 22 500 25 000 27 500 30 000 DJIA Dow/Gold ratio
  12. 12. 12 Gold/MSCI World Ratio (log), 01/1990–02/2020 Source: StockCharts.com, Reuters Eikon, Incrementum AG 0.13 0.25 0.50 1.00 2.00 1990 1995 2000 2005 2010 2015 2020 Gold/MSCI World ratio First rate cut 01/2001 First rate cut 09/2001 First rate cut 07/2019
  13. 13. 13 S&P 500 and Gold Performance in Biggest S&P 500 Decline Phases Source: BMG Group Inc., Incrementum AG Biggest S&P 500 declines S&P 500 Gold 09/1976 - 03/1978 -19.4% 53.8% 08/1987 - 12/1987 -33.5% 6.2% 07/1990 - 10/1990 -19.9% 6.8% 03/2000 - 10/2002 -49.0% 12.4% 10/2007 - 03/2009 -56.8% 25.5% 05/2011 - 10/2011 -19.0% 9.4%
  14. 14. 14 Gold Returns in Various Currencies Source: Michael Nicoletos, Incrementum AG Gold Returns 1971-1980 1980-1990 1990-2000 2000-2010 2010-today 2019 in USD 1,268% -22% -28% 281% 39% 19% in EUR 1,256% -3% -15% 168% 80% 23% in GBP 1,275% 9% -28% 281% 84% 24% in CHF 1,098% -24% -26% 148% 32% 19% in JPY 1,219% -53% -49% 246% 59% 15% in AUD 1,269% 7% -18% 179% 85% 24% in CAD 1,282% -23% -10% 177% 75% 16% in INR 1,274% 30% 33% 313% 114% 23% in RUB 1,296% -17% 30% 306% 209% 15% in ZAR 1,251% 142% 73% 357% 189% 27% in CNY 1,204% 155% 26% 214% 46% 24% in TRY 1,358% 74% 71% 939% 442% 31% in BRL 1,360% -24% 72% 278% 232% 27% in ARS 1,356% 68% -29% 1,370% 1,930% 75%
  15. 15. 15 Bloomberg Commodity Index TR (lhs), and US Dollar Index (rhs, inverted), 01/2009–02/2020 70 75 80 85 90 95 100 105 110100 150 200 250 300 350 400 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Bloomberg Commodity Index TR US Dollar Index Source: Reuters Eikon, Incrementum AG
  16. 16. 16 Central Bank Gold Reserves in % of Total Global Gold Stock, 1845–2019 0% 10% 20% 30% 40% 50% 60% 1845 1860 1875 1890 1905 1920 1935 1950 1965 1980 1995 2010 Central bank gold reserves in % of total global gold stock Source: Nick Laird, goldchartsrus.com, World Gold Council, Incrementum AG
  17. 17. 17 Central Bank Gold Reserves, in tonnes, Q1/2000–Q4/2019 Source: World Gold Council, Incrementum AG 8 000 13 000 18 000 23 000 28 000 33 000 Q1 2000 Q1 2002 Q1 2004 Q1 2006 Q1 2008 Q1 2010 Q1 2012 Q1 2014 Q1 2016 Q1 2018 Rest of the World Euro Area (incl. ECB) United States Russia China
  18. 18. 18 Value of Central Bank Gold Reserves in % of GDP, 2000–2019 Source: Nick Laird, goldchartsrus.com, World Bank, World Gold Council, Incrementum AG 0% 1% 2% 3% 4% 5% 6% 7% 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Russia Euro Area (incl. ECB) USA Rest of the World China
  19. 19. 19 Value of Global Central Bank Gold Reserves in % of Global GDP, 1870– 2019 Source: Nick Laird, goldchartsrus.com, World Gold Council, ourworldindata.org, IMF, World Bank, Incrementum AG 0% 1% 2% 3% 4% 5% 6% 7% 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 Value of global central bank gold reserves in % of global GDP
  20. 20. 20 Value of Gold Reserves as % of GDP in Top 10 Countries with Largest Gold Reserves, 2000 vs. 2019 0.3% 1.9% 1.6% 0.7% 1.9% 0.1% 1.9% 1.2% 8.0% 0.7%0.7% 4.2% 4.1% 1.0% 5.8% 0.7% 3.2% 6.6% 6.9% 1.8% 0% 2% 4% 6% 8% 10% China France Germany India Italy Japan Netherlands Russia Switzerland USA 2000 2019 Source: IMF, World Gold Council, Incrementum AG
  21. 21. 21 2. Recession Despite numerous indications, still a Black Swan? “Boy, that escalated quickly…!” Ron Burgundy, “Anchorman”
  22. 22. 22 Economic Expansions by Length (lhs), in months, and Magnitude (rhs), in % 37 45 39 24 106 36 58 12 92 120 73 126 3.1 6.9 4.0 5.6 4.8 5.1 4.4 4.4 4.3 3.6 2.9 2.3 0 1 2 3 4 5 6 7 8 0 20 40 60 80 100 120 140 Oct-1945 Oct-1949 May-1954 Apr-1958 Feb-1961 Nov-1970 Mar-1975 Jul-1980 Nov-1982 Mar-1991 Nov-2001 Jun-2009 Length Magnitude Source: Department of Commerce, Incrementum AG
  23. 23. 23 Global Economic Policy Uncertainty Index, 01/1997–12/2019 0 50 100 150 200 250 300 350 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Recession Global Economic Policy Uncertainty Index Source: Federal Reserve St. Louis, Incrementum AG
  24. 24. 24 Recesssion Probability within the Next 12 Months, 01/1990–01/2020 0% 10% 20% 30% 40% 50% 1990 1995 2000 2005 2010 2015 2020 Recession Recession probability (12 months ahead) Source: Federal Reserve NY, Incrementum AG
  25. 25. 25 Percentage of US Yield Curve Inversions, 01/1970–02/2020 0% 20% 40% 60% 80% 100% 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Recession Percentage of US yield curve inversions ? Source: Tavi Costa, Crescat Capital LLC, Incrementum AG
  26. 26. 26 ISM Manufacturing Index (lhs), and US 10Y-3M Treasury Spread, in % (rhs, 1 year advanced), 01/1960–02/2021 -3 -2 -1 0 1 2 3 4 5 25 35 45 55 65 75 1960 1970 1980 1990 2000 2010 2020 Recession ISM Manufacturing Index US 10Y-3M Source: franzlischka.blogspot.com, Reuters Eikon, Incrementum AG
  27. 27. 27 Distribution of US GDP Projections Made by 87 Analysts, per Year, in %, 2020–2021 0 5 10 15 20 25 30 0 0.5 1 1.5 2 2.5 3 Numberofanalysts Annual GDP growth 2020 2021 Source: Reuters Eikon, Incrementum AG
  28. 28. 28 Federal Funds Rate, in % (lhs), and S&P 500 (log, rhs), 01/1990–02/2020 200 400 800 1 600 3 200 0 2 4 6 8 10 1990 1995 2000 2005 2010 2015 2020 Recession Federal funds rate S&P 500 (log) Source: Reuters Eikon, Incrementum AG
  29. 29. 29 Average Working Hours to Buy the S&P 500, 1860–2020 Source: Nick Laird, goldchartsrus.com, Reuters Eikon, Incrementum AG 0 20 40 60 80 100 120 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 Hours Average Average = 30.9
  30. 30. 30 3. Inflation The ultimate pain trade? “The two main risk factors for the average portfolio are less- than-expected growth and more-than-expected inflation.” Ray Dalio
  31. 31. 31 Everything Bubble, Q1/1970–Q3/2019 3.0 3.5 4.0 4.5 5.0 5.5 6.0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Financial assets of households/Disposable personal income Dot-Com Bubble Housing Bubble Everything Bubble Source: Federal Reserve St. Louis, Incrementum AG
  32. 32. 32 Measures of Core Inflation, YoY%, 01/1995–01/2020 Source: Reuters Eikon, Incrementum AG -2 -1 0 1 2 3 4 5 1995 2000 2005 2010 2015 2020 Dallas Fed trimmed mean PCE inflation rate Cleveland Fed median CPI US CPI less food & energy US personal consumption expenditure index
  33. 33. 33 Purchasing Power Loss of the USD (lhs), and Gold Price Multiple (rhs), 1900–2019 0 10 20 30 40 50 60 70 80 90 0 10 20 30 40 50 60 70 80 90 100 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 Purchasing power USD Gold Source: Nick Laird, goldchartsrus.com, Incrementum AG
  34. 34. 34 Money Supply per Capita in the US, in USD, 1960–2019 Source: Nick Laird, goldchartsrus.com, Reuters Eikon, Incrementum AG 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Currency in circulation per capita M1 per capita M2 per capita
  35. 35. 35 Milligrams Gold per Euro, 01/1999–02/2020 0 20 40 60 80 100 120 140 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Milligram gold per Euro -83% Source: Federal Reserve St. Louis, Incrementum AG
  36. 36. 36 Euro Purchasing Power Loss, 1999–2020 Source: Reuters Eikon, Incrementum AG 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00 1999 2002 2005 2008 2011 2014 2017 2020 Actual Planned
  37. 37. 37 Purchasing Power of Euro and Gold as Measured by the Average Expenditure per Soccer Player Transfer (log), 1970–2019 0.0 0.1 1.0 10.0 1970 1977 1984 1991 1998 2005 2012 2019 Euro Gold Source: Nick Laird, goldchartsrus.com, transfermarkt.de, Incrementum AG
  38. 38. 38 Inflation by Item in Great Britain Source: The Guardian (2019), Incrementum AG Item Price in 1969 In 1969 ounces of gold Inflation adjusted price Current price In current ounces of gold Average house price £4,312 292 £71,333 £215,910 185 Average wage (male, full time) £1,560 106 £24,050 £31,834 27 Average wage (female, full time) £847 57 £13,068 £26,103 22 Sports car £890 60 £14,723 £22,160 19 Small car £595 40 £9,860 £16,195 14 Flight (London to Tokyo) £325 22 £5,376 £900 0.77 Colour television (19 inch) £240 16 £3,970 £99 0.085 Package holiday (two weeks in Benidorm, August, pp) £78 5.3 £1,290 £950 0.82 Fresh whole chicken 41p 0.028 £6.80 £2.80 0.0024 Instant coffee 21.8p 0.015 £3.60 £1.89 0.0016 Eggs (dozen, large) 20.2p 0.014 £3.34 £1.89 0.0016 Beer (pint of bitter) 10p 0.007 £1.65 £3.70 0.0032 Loaf of white bread 8p 0.005 £1.32 59p 0.0005 Bag of sugar 8p 0.005 £1.32 69p 0.0006 Petrol (litre) 7.3p 0.005 £120 128p 0.0011 Milk (pint) 4.4p 0.003 73p 50p 0.0004 Stamp 2.2p 0.001 36.5p 70p 0.0006 Tube fare (one mile) 2.2p 0.001 36.5p £2.40 0.0021 Electricity (per kwh) 0.78p 0.001 12.9p 14.4p 0.0001
  39. 39. 39 US CPI Growth by Decade, in %, 1950–2019 24% 28% 158% 64% 34% 28% 19% 0% 20% 40% 60% 80% 100% 120% 140% 160% 1950s 1960s 1970s 1980s 1990s 2000s 2010s CPI by decade Source: Bloomberg, Incrementum AG
  40. 40. 40 US 10Y Breakeven Inflation Rate (lhs), and Dow/Gold Ratio (rhs), 08/2018–02/2020 Source: Reuters Eikon, Incrementum AG 15 16 17 18 19 20 21 22 23 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 08/2018 11/2018 02/2019 05/2019 08/2019 11/2019 02/2020 US 10Y Breakeven inflation rate Dow/Gold ratio
  41. 41. 41 Global Negative-Yielding Debt, in USD tn, 01/2012–02/2020 0 2 4 6 8 10 12 14 16 18 2012 2013 2014 2015 2016 2017 2018 2019 2020 Global negative yielding debt market value Source: Bloomberg, Incrementum AG
  42. 42. 42 4. Gold Mining Stocks Gold up, gold stocks catching up? “The time to repair the roof is when the sun is shining.” John F. Kennedy
  43. 43. 43 BGMI Bull Markets Since 1942 0 100 200 300 400 500 600 700 800 1 41 81 121 161 201 241 281 321 361 401 Number of Weeks 10/1942-02/1946 07/1960-03/1968 12/1971-08/1974 08/1976-10/1980 11/2000-03/2008 10/2008-04/2011 01/2016-02/2020 current bull market Source: Nowandfutures, TheDailyGold.com, Barrons, Incrementum AG
  44. 44. 44 Annual Over-/Underperformance of the BGMI Compared to Gold in USD, in %, 1971–2019 -75% -50% -25% 0% 25% 50% 75% 100% 125% 1971 1977 1983 1989 1995 2001 2007 2013 2019 Over/Underperformance Source: Bullion Management Group Inc., Nick Laird, goldchartsrus.com, Incrementum AG
  45. 45. 45 MSCI Emerging Markets Currency Index, and SPDR Gold Shares, indexed, 100 = 01/2016, 01/2016–02/2020 90 100 110 120 130 140 150 160 2016 2017 2018 2019 2020 MSCI emerging markets currency index SPDR gold shares Source: Gavekal, Reuters Eikon, Incrementum AG
  46. 46. 46 S&P 500 & GDM Index, 01/1994–02/2020 Source: Reuters Eikon, Incrementum AG 0 500 1 000 1 500 2 000 2 500 3 000 3 500 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 S&P 500 GDM Inverse Inverse
  47. 47. 47 BGMI/S&P 500 Ratio (log), 01/1940–02/2020 Source: Nick Laird, goldchartsrus.com, Reuters Eikon, Incrementum AG 0 1 10 1940 1950 1960 1970 1980 1990 2000 2010 2020 BGMI/S&P 500 ratio Median (BGMI/S&P 500 ratio)
  48. 48. 48 BGMI/Gold Ratio (log), 01/1940–02/2020 Source: Nick Laird, goldchartsrus.com, Reuters Eikon, Incrementum AG 0 1 10 1940 1950 1960 1970 1980 1990 2000 2010 2020 BGMI/Gold ratio Median (BGMI/Gold ratio)
  49. 49. 49 5. Quo Vadis? Will gold exceed its all-time high in USD? “The only permanent truth in finance is that people will get bullish at the top and bearish at the bottom.” Jim Grant
  50. 50. 50 Actual Gold Price and Projections, in USD, 1971–2049 Source: Pierre Lassonde, Reuters Eikon, U.S. Global Investors, Incrementum AG 0 5 000 10 000 15 000 20 000 25 000 1970 1980 1990 2000 2010 2020 2030 2040 Actual gold price Compound annual growth rate (from 1971) Compound annual growth rate (from 1990) Compound annual growth rate (from 2000) from 1971: 7.7% p.a. from 1990: 4.8% p.a. from 2000: 9.5% p.a.
  51. 51. 51 Gold Price Necessary for a Return to the Gold Standard, 1960–2019 0 5 000 10 000 15 000 20 000 25 000 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Actual gold price Gold price necessary to back 40% of M2 Source: Wells Fargo Investment Institute, Reuters Eikon, Incrementum AG
  52. 52. 52 300 Years of Gold/Silver Ratio, 1718–2019 0 20 40 60 80 100 120 1718 1768 1818 1868 1918 1968 2018 Gold/silver ratio Average Median 2019: G/S ratio = 85 ~3x above average ~5x above median Source: Nick Laird, goldchartsrus.com, Incrementum AG
  53. 53. 53 Gold/Silver Ratio Scenarios (x-axis: Silver Price, y-axis: Gold Price) Source: Incrementum AG, *Average G/S ratio since 1718 (Nick Laird, goldchartsrus.com) Gold/Silver Ratios 10.0 14.3 20.0 25.0 33.3 50.0 100.0 1,000 100.0 70.0 50.0 40.0 30.0* 20.0 10.0 1,100 110.0 77.0 55.0 44.0 33.0 22.0 11.0 1,200 120.0 84.0 60.0 48.0 36.0 24.0 12.0 1,300 130.0 91.0 65.0 52.0 39.0 26.0 13.0 1,400 140.0 98.0 70.0 56.0 42.0 28.0 14.0 1,500 150.0 105.0 75.0 60.0 45.0 30.0* 15.0 1,600 160.0 112.0 80.0 64.0 48.0 32.0 16.0 1,700 170.0 119.0 85.0 68.0 51.0 34.0 17.0 1,800 180.0 126.0 90.0 72.0 54.0 36.0 18.0 1,900 190.0 133.0 95.0 76.0 57.0 38.0 19.0 2,000 200.0 140.0 100.0 80.0 60.0 40.0 20.0 2,100 210.0 147.0 105.0 84.0 63.0 42.0 21.0 2,200 220.0 154.0 110.0 88.0 66.0 44.0 22.0 2,300 230.0 161.0 115.0 92.0 69.0 46.0 23.0 2,400 240.0 168.0 120.0 96.0 72.0 48.0 24.0
  54. 54. 54 S&P 500/Silver Ratio, 01/1990–02/2020 Source: Crescat Capital LLC, Tavi Costa, Reuters Eikon, Incrementum AG 0.00 0.01 0.02 0.03 0.04 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 S&P 500/Silver ratio
  55. 55. 55 Commodities – The Biggest Contrarian Investment? GSCI TR/S&P 500 Ratio, 01/1971–02/2020 0 1 2 3 4 5 6 7 8 9 10 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 SPGSCITR Commodity Index/S&P 500 ratio Median: 4.09 GFC 2008 Gulf War 1990 Oil Crisis 1973/74 Dot-Com Bubble Everything (except commodities) Bubble Source: Bloomberg, Torsten Dennin, Lynkeus Capital, Incrementum AG
  56. 56. 56 The World's Largest Firms by Market Cap* – Time To Revisit Commodity Stocks? Source: Gavekal, Incrementum AG. *Not including Berkshire and Saudi Aramco
  57. 57. 57 The In Gold We Trust report 2020 will be published on May 27th! Subscribe by following the link: https://ingoldwetrust.report/igwt/?
  58. 58. 58 Addendum Because we care… About our Clients. About the Society. About the Future.
  59. 59. 59 About the In Gold We Trust report • The gold standard of gold research: Extensive annual study of gold and gold-related capital market developments • Reference work for everybody interested in gold and mining stocks • International recognition – newspaper articles in more than 60 countries; almost 2 million readers • To be published for the 14th time on May 27, 2020, with versions in English, German, and Chinese • Further information and all editions can be found at: https://ingoldwetrust.report/?lang=en
  60. 60. 60 About the Authors Ronald-Peter Stoeferle, CMT • Ronni is managing partner of Incrementum AG and responsible for research and portfolio management • In 2007 he published his first In Gold We Trust report. Over the years, the study has become one of the benchmark publications on gold, money, and inflation. • Advisor for Tudor Gold Corp. (TUD), a significant explorer in British Columbia’s Golden Triangle. • Member of the advisory board of Affinity Metals (AFF). Mark J. Valek, CAIA • Mark is a partner of Incrementum AG and responsible for portfolio management and research. • Prior to Incrementum, he was with Merrill Lynch and then for 10 years with Raiffeisen Capital Management, most recently as fund manager in the area of inflation protection. • He gained entrepreneurial experience as co-founder of philoro Edelmetalle GmbH.
  61. 61. 61 Selected Testimonials John Reade Chief Market Strategist World Gold Council “Arguably, the In Gold We Trust report is the most comprehensive analysis of the global political economy through the lens of the Austrian School of economic thought. A unique perspective on gold, with some fantastic charts and always an enjoyable read.”
  62. 62. 62 Selected Testimonials Rick Rule President & CEO Sprott U.S. Holdings, Inc “A must-read for people who invest in precious metals and precious metals equities. A pleasant read, too – well-researched and well-written.”
  63. 63. 63 Selected Testimonials Brien Lundin Editor of Gold Newsletter and CEO of the New Orleans Investment Conference “The annual In Gold We Trust report has become today’s most widely read and perhaps most influential piece of research on gold, along with the major economic and market trends affecting it.”
  64. 64. 64 Selected Testimonials Simon Mikhailovich Founder Tocqueville Bullion Reserve “When it comes to finding the most insightful and comprehensive annual gold report, in Incrementum I trust.”
  65. 65. 65 About Incrementum AG Incrementum AG is an owner-managed and fully licensed asset manager & wealth manager based in the Principality of Liechtenstein. more information on www.incrementum.li ❖ Independence is the cornerstone of our philosophy. The partners own 100% of the company. ❖ Our goal is to offer solid and innovative investment solutions that do justice to the opportunities and risks of today’s complex and fragile environment. ❖ Our core competencies are in the areas of: o Wealth management o Precious metal and commodity investments o Active inflation protection o Crypto and alternative currency exposure o Special mandates
  66. 66. 66 Contact Us Incrementum AG Im alten Riet 102 9494 – Schaan/Liechtenstein www.incrementum.li www.ingoldwetrust.li Email: ingoldwetrust@incrementum.li
  67. 67. 67 Disclaimer This publication is for information purposes only. It represents neither investment advice nor an investment analysis or an invitation to buy or sell financial instruments. Specifically, the document does not serve as a substitute for individual-investment or other advice. The statements contained in this publication are based on knowledge as of the time of preparation and are subject to change at any time without further notice. The authors have exercised the greatest possible care in the selection of the information sources employed. However, they do not accept any responsibility (and neither does Incrementum AG) for the correctness, completeness, or timeliness of the information as well as any liabilities or damages, irrespective of their nature, that may result therefrom (including consequential or indirect damages, loss of prospective profits, or the accuracy of prepared forecasts). Copyright: 2020 Incrementum AG. All rights reserved.

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