China could boost the gold price
In the past, China was not accessible to investors. Now a globally accessible market has emerged. Investors have the opportunity to trade stocks and bonds. Bonds are now also upgraded. Because Chinese government bonds are added to the WBGI. This is a milestone for Chinese bonds, because investors are looking for investment opportunities in an interest-free world. In China, they still exist in yuan.
This could have a negative impact on the US, Europe, Japan and the UK as they will lose weight in the index. Some will be redistributed to China, as the WBGI is followed by a large passive group of investors. According to estimates, the capital flows could amount to around 150 billion US dollars. This is because the WGBI will probably be replicated by USD 1 trillion in passively managed funds. This should particularly affect the US dollar. At least this will reduce demand for it. A loss in value is foreseeable.
All this is happening while the national debt is immense and continues to rise due to Covid-19. Investors buy government debt at low yields. Once the corona crisis is overcome, then a rising number of sales can be expected.
Therefore, it might be better to enter the safe haven of gold. According to the experts, investors should use the temporary low in the gold price for an aggressive entry. Even if the weakness of the gold price should continue through the autumn, a second part of the gold price rally is expected. Then it would not be bad to have promising gold companies in the portfolio.
Such as Mawson Gold or Treasury Metals. Mawson Gold has projects in two mining friendly areas. The Rompas Rajapalot Project in Finland with gold and cobalt resources and the Sunday Creek Project in Australia. Drilling is underway on both projects, including geophysical electromagnetic surveys in Finland.
Treasury Metals will begin production at its Goliath gold project in Ontario in the foreseeable future. Treasury Metals also owns the Goldlund Project in Ontario, as well as other gold projects and a polymetallic project.
Latest corporate information and press releases from Mawson Gold (https://www.resource-capital.ch/en/companies/mawson-gold-ltd/) and Treasury Metals (https://www.resource-capital.ch/en/companies/treasury-metals-inc/).
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