Over the last several weeks, we’ve been building the case that negative interest rates are good for gold, and mainstream analysts have echoed our thoughts.

japan gold

Last week, Britain’s largest bank, HSBC, issued a statement saying the longer the world’s central banks continue to experiment with negative interest rates,the better the outlook for gold. James Steel, HSBC’s chief precious-metals analyst, cited a Bank of International Settlements report to bolster his case:

How does this play out for gold? Positively we think. The imposition of negative rates is a sign of distress, which is gold-bullish. Furthermore, the uncertainty surrounding the long run impact of negative rates as outlined in the BIS report is also supportive of gold. The BIS report seems to say that negative rates have brought uncertainty, especially as regards their impact on financial intermediaries, but have not delivered hoped for gains for households and businesses. This is to gold’s benefit.”

Vetern trader Dennis Gartman helped make the case as well. After emphasizing in an interview on CNBC Futures Now that he is “not a gold bug,” he said as long as central banks continue expansionary monetary policy – negative interest rates and quantitative easing – the upward trend in gold will continue.

Now we have confirmation that this isn’t all mere speculation. Bloomberg recently reported Japan’s negative interest rates are, in fact, boosting demand for gold, according to the nation’s biggest bullion retailer.

Gold has surged worldwide since the beginning of the year as investors seek a safe haven in the midst of growing economic uncertainty. Takahiro Ito, chief manager at Tanaka Kikinzoku Kogyo K.K.’s store in Tokyo, said the Bank of Japan’s surprise move to drop interest rates into negative territory added to gold’s allure:

Many customers are wagering that it’s better to turn their savings to gold as a safe asset rather than deposit money at banks that offer low interest rates.”

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