Studio Guest: Christine Schweikert, Raw Materials Expert

Our studio guest this week is Christine Schweikert. She is raw materials expert at BHF Bank DW-TV: So how do you feel about gold seeing that you work with it on a daily basis ? Christine Schweikert: Well, I quite like gold and I think it is very interesting what we have seen in the last couple of months in that you get a credit crisis and a dollar going down and people go into gold. It's a tangible asset and people feel good about it and they buy it. DW-TV: But would you be interested in investing in too, yourself? Christine Schweikert: Probably not actually because as an economist I tend to invest in things that are interest bearing and gold won't give you any interest, the price might go up but if you want to store the gold, hang on to it, you have costs on top of everything so I'd rather not. DW-TV: Nevertheless we see worldwide a kind of new gold rush. The price for one ounce of gold has risen from about 600 to some 800 US dollars, this year alone. While at the same time, of course, the dollar has dropped into an abyss. Now Christine Schweikert, what do you make of this chart here? Christine Schweikert: If the dollar drops gold tends to go up. People buy it as a hedge against the falling dollar and a falling dollar tends to come at times when insecurity is high. At the moment you have high liquidity, high insecurity so people go into gold. So it is the gold factor plus interset rates are coming down and if you don't get much interest on the other assets then gold tends to become more attractive. DW-TV: Can you explain that boom, that high demand for gold? Christine Schweikert: People looked at the credit crisis and they had assets they did not quite understand and gold is easy to understand. DW-TV: What do you do with it. Do you take it home? Christine Schweikert: Well, some people do take it home and keep it there but others invest in exchange traded funds or other derivatives. There is a heck of a lot of derivatives you can invest in so you don't have to have the gold at home under the mattress. You can just invest on the exchanges. DW-TV: Some of your colleagues say we just see the start of a new gold rush. Do you agree? Christine Schweikert: I don't know about a gold rush but I think gold is going to go up a bit further because it is seen as a safe haven and I think the credit crisis is going to follow us for a while so I think the demand for gold is going to be quite high. Interview: Monica Jones

DW-World | December 4, 2007

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