COVID-19 fueled the largest deflationary shock to the economy seen since the global financial crisis. The massive accumulation of debt aimed at combating the pandemic continues to drag on productivity that could guarantee a low growth economy for decades to come. While there are no inflation worries at the moment, the Fed’s new softer stance risks sowing the seeds of unwanted inflation in the future, driven by massive fiscal and central bank liquidity and a reluctance or inability to raise interest rates to stop it. Persistent risks to economic well-being, a weaker dollar, and negative real rates are all drivers that may push gold prices above $3,000 per ounce in the coming years.
Meanwhile, in our view, gold companies have become one of the most fundamentally attractive investment opportunities in the market today. With higher gold prices, established companies are seeing strong cash flow and expanding margins while some junior developers and producers are making new discoveries and expanding production.
It continues to be an exciting time for gold.
- Investor sentiment and the macroeconomic outlook for gold
- Gold miners’ ongoing efforts to win back investors
- Portfolio positioning and companies we’re excited about heading into Q3 2020
Portfolio Manager, Gold Strategy
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You can lose money by investing in the International Investors Gold Fund. Any investment in the Fund should be part of an overall investment program, not a complete program. The Fund is subject to the risks associated with concentrating its assets in the gold industry, which can be significantly affected by international economic, monetary and political developments. The Fund’s overall portfolio may decline in value due to developments specific to the gold industry. The Fund’s investments in foreign securities involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, or political, economic or social instability. The Fund is subject to risks associated with investments in Canadian issuers, commodities and commodity-linked derivatives, commodities and commodity-linked derivatives tax, gold-mining industry, derivatives, emerging market securities, foreign currency transactions, foreign securities, other investment companies, management, market, non-diversification, operational, regulatory, small- and medium-capitalization companies and subsidiary risks.
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