Analysts lift gold 58 places higher amid central bank purchases

The Roundtable 100 analysts this week lifted gold 58 places higher amid Washington's $40 trillion debt.

The bullion was the biggest climber in the power ranking this week.

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Gold climbs to No. 40 

Published with TheStreet, The Roundtable 100 ranks the top 100 publicly traded technology growth assets. Each is scored from 0 to 100 by the analysts of the Blue Ribbon Committee on five variables, Team, Safety, Value, Innovation, and Market Dominance, with the average forming the asset's Power Ranking. The list refreshes every Friday after the U.S. market close.

The RTB 100 committee's analysts rank an asset on the basis of its future growth potential instead of its current valuation.

Committee member John Divine, who handles institutional crypto execution at BlockFills, made a macro case for gold.

The U.S. is sitting on a federal debt of more than $40 trillion and though the Federal Reserve can raise interest rates by another 0.25% in the face of inflation, it can't go higher because then the U.S. Treasury will have to pay more on the interest payments on the debt it has borrowed, he observed.

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Here is what it means.

The Treasury issues bonds, which are loans that an individual or another government gives to the U.S. government. The government vows to pay interest and return the money at maturity.

When interest rates remain low, these bonds are not attractive to investors. But if the Fed raises rates, it costs the government more to borrow money.

Gold doesn't have to deal with this circular loop, Divine argued.

"Treasuries have to be rolled when they mature. Gold just sits there."

Find out gold's score on the Roundtable 100

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Investors tend to buy gold when they're worried about rising inflation or debt.

The RTB 100 analyst highlighted that central banks have added about 289 tonnes of gold in the second quarter. He took the example of Poland which is moving toward a 700-tonne target.

A record 45% of reserve managers say they plan to add more gold over the next year, Divine added.

See the full ranking.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investments are subject to market risk. Always conduct your own research before making any investment decisions.

Disclosure: RTB Digital, Inc. (Nasdaq: RTB), publisher of the Roundtable 100, is itself a ranked constituent of the index. The Roundtable 100 is published for informational purposes only and is not investment advice, an offer, or a recommendation to buy or sell any security, commodity or digital asset. Rankings reflect the views of Roundtable analysts as of the ranking date. Investing involves risk, including loss of principal.

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