Gold prices are at their highest in a year, but Deutsche Bank still says “buy” by Melvin Backman

To your bunkers!

Deustche Bank put out a note this morning (per CNBC) that advised holding gold as an insurance policy against the financial bogeymen possibly in our midst, like the prospects for a pickup in US corporate defaults, or the threat of a sharp currency devaluation by China.

It’s a bit of an odd time to be buying gold if you invest with a “buy low, sell high” mentality. Granted, the shiny yellow stuff is down considerably from its $1,900 highs just a few years ago, but it’s showing signs of life lately, rising nearly 20% year to date.

https://atlas.qz.com/charts/4kR2z_Yjg

Gold has certain drawbacks that exist in any economic climate. (Namely, it has little intrinsic value and you have to pay to put it somewhere if you’re planning to hold onto it for a while.) But it’s often seen as a safe haven when inflation and volatility are high—and global markets have been flux for the past few months now, keeping volatility in the mix…

https://atlas.qz.com/charts/4J4M3uYig

…while inflation seems to be rising from the dead.

https://atlas.qz.com/charts/EyCyT_Ysg

Plus, with some central banks out there pushing interest rates below zero (America excluded), a zero-yielding asset might be better than cash anyway. So, all in all, this could be a pretty good trade. It just would’ve been nice to have gotten a jump on it sooner.

https://atlas.qz.com/charts/41FLUdtog

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