EFN | Gold, safe havens and inflation with AuAg Funds portfolio manager Eric Strand

Eric Strand, portfolio manager at AuAg Funds, joined Börslunch on EFN to discuss the gold price correction, what sentiment indicators are currently signalling, and why the present inflation environment may be misread by markets.

Valuable insights:

• The conventional view that rate hikes hurt gold didn't hold in the last cycle. Eric notes that gold performed strongly through the last rate-hiking cycle, pushing back on the widely held assumption that rising rates are automatically negative for gold.

• Today's inflation is coming from oil, and rate hikes would add to the problem. Eric argues this is cost-push inflation driven by energy costs — not the demand-driven kind that rate hikes are designed to fix.

• If the Fed is forced to buy its own bonds, the gold outlook changes significantly. With China and oil-producing nations stepping back from US treasuries, Eric sees a scenario where the Fed resorts to QE — something markets have not priced in, and that he views as positive for gold.