In a context such as the current one, characterized by a very high level of public debts (especially
as regards the West), by extremely complicated geopolitical relations, by economic growth
induced by the expansive monetary policy of the various central banks, physical gold (by taking
an etc physical gold), it is an essential component for the coverage of our portfolios. We explain
why, analyzing each of these dynamics.
 

* The public debt of Western countries, as Italians know, has reached dangerous levels. This
Damocles’ sword hangs over the "weaker" countries, but for some years also on the most
flexible and powerful economies, like the American one (in the last month the shutdown has
been a clear demonstration). This dimension, protracted and increased over time, generates
two types of reactions in investors:
 

- in a first step, without major growth problems and with help of central banks that manage
keeping interest rates low (reducing the perception of debt risk), good returns are expected
both for bonds and stocks and they sell gold (for instance 2011-2018);
 

- in a second step, after an inevitable rise in inflation and economic slowdown, typical final phase
of an economic cycle (like the current period) that often determines the loss of purchasing
power of the most noble currencies, investors prefer to buy gold .
 

* Global geopolitical relationships are progressively deteriorating with strong implications on
the precious metal market. The recovery of the US-Russia cold War and the US-China trade war
has led on the one hand the two central banks to sell dollar reserves buying gold, about 280
tons (the Russians) and much more Chinese, in the last 5 years. The Americans responded by
keeping their huge 8,000-ton stock intact. The East countries like Hungary, Poland, have also
been net buyers, defending themselves from a possible isolation in the context of relations of
force and power within the European Union.
 

* The monetary policy of central banks, as we have seen, conditions the gold market in
determining the economic cycles.