The aggressive monetary policies of major central banks along with the economic effects of the pandemic and the Ukraine war have created a challenging environment for investors.
For people looking to invest in the current economic climate, it is best to go with a cautious approach. A capital protected investment solution offering the possibility to earn in both bullish and bearish markets in precious metals is highly demanded by smart investors.

Current Market Conditions

From the beginning of 2022, we have seen a steady increase in the long-term interest rates in most developed countries. In the US, the interest rate increased from 1.47% per annum in Dec 2021 to 2.90% in Apr 2022. Similarly, there has been a sharp rise in rates in Germany, France, Italy, and the UK as well. The short-term interest rates in the euro area (19 countries) rose from -0.55% per annum in Dec 2021 to 0.05% per annum in Apr 2022.
The rising interest rates not only cause an outflow of investment from the stock market but – by increasing the price of the USD – also put negative pressure on the prices of commodities like gold, silver, and platinum.
In 2021, we saw optimism among consumers, with the consumer price index (CPI) reaching new highs in the last quarter of 2021. This optimism existed despite the spread of the omicron variant. However, we have seen a change for the worse in consumer confidence during 2022. This reversal is fuelled by increased inflation and the ongoing Ukraine war among other factors. For the commodity market, a diminishing supply of precious metals due to sanctions is a negative effect of the war and we expect it to continue in the coming months.
Besides the increase in interest rates pushing gold prices lower, the issue of supply and inflation has a strong effect on gold prices. A combination of interest rate hikes and supply issues might cause uncertainty in the short term, before a clear winner of these two forces emerges initiating a clear directional move, bearish or bullish, on precious metals.

Decomposed Twin Win Solution

Our clients in the commodity market, have been demanding to replicate a twin win solution in the three leading precious metals – gold, platinum, and silver – through our market-leading best execution platform in partnership with one of the leading private bank globally.
A Twin-Win solution allows investors to get a return on their investment regardless of how the underlying asset performs. Investors earn an income in both bullish and bearish markets provided a KO does not occur. KO refers to the breaching of price barriers set in the Twin-Win. In case of a KO, the investor will receive a guaranteed rebate embedded in the structure to enable a small boost if the barriers do hit.
Twin-Win Notes are normally structured products sold as one unique investment package, where most of the times, high fees are hidden. Using our expertise and our best execution platform with our wealth management partner bank, we decompose the structure product package and offer to smart investors the individual components to improve their payoff.
A Twin-Win is constructed by combining a fiduciary deposit with the underlying derivatives. The fiduciary deposit will return your capital at expiry and the interest generated will cover the cost of the derivatives purchased to have a potential return in bullish and bearish markets.
Our clients will see each component in their wealth management account where we place the initial investment capital into the best paying fiduciary deposits and where we put in competition up to 15 investment banks for the derivatives component.

The result is a decomposed Twin Win solution, totally transparent with better conditions and an improved payoff.

 

 

Decomposed Twin-Win solution

Scenarios at maturity:

Scenario1: The underlying has never traded above the Upper Bound or below the Lower Bound during the product’s lifetime:

The investor receives 100% + 100% of the underlying performance in absolute value

Example: if the performance of the underlying is -7% (as calculated from the Initial Fixing to the closing level of the Final Fixing Date), the investor receives 107% at Maturity.

Scenario 2: The underlying has traded at least once above the Upper Bound or/and at least once below the Lower Bound during the product’s lifetime, KO event:

The investor receives 100.00% + the rebate rate

Gold

 

Silver

 

Platinum

 

At TRIUS, we specialise in the trading of forex and precious metals. Following the success of our institutional trading platform, we bring our industry expertise as independent advisors. Our seasoned financial experts offer clients the knowledge, experience, and connections they need to succeed as investors.

 

Disclaimer

Issued by TRIUS Partners AG to professional investors; it is not for retail Clientele. This material is purely for your information and it is not intended as an offer, inducement, recommendation, or a solicitation of an offer, to buy or sell any investment or other specific product. This material has no regards to the specific investment objectives, financial situation or particular needs of any specific recipient. Certain services and products are subject to legal restrictions and cannot be offered globally on an unrestricted basis and/or may not be eligible for sale to all investors. All information provided in this material were based on proprietary knowledge or furnished by sources considered reliable, but no representation or warranty, express or implied, is made as to its accuracy or completeness, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the materials. All information, opinions, forecasts, estimations, prices and conditions indicated are indicative as of the publication date, and are subject to market conditions that might change at any time without notice. Past performance is not an indication of future results. TRIUS and any of its directors or employees may be entitled at any time to hold long or short positions in investment instruments referred to herein, carry out any transactions involving relevant investment instruments in any capacity. Prior to entering into a transaction, you should consult with your own legal, regulatory, tax, financial and accounting advisers to the extent you deem necessary to make your own investment, hedging and trading decisions. TRIUS Partners AG does not provide legal or tax advice and makes no representations as to the tax treatment of assets or the investment returns thereon both in general or with reference to specific Client’s circumstances and needs. Options, structured derivative products and futures are not suitable for all investors, and trading in these instruments is considered risky with high volatility and may be appropriate only for sophisticated investors. Trading on these products might cause substantial losses and these losses might excess your initial investment. Multiple theoretical explanations of the risks associated with these instruments have been published. Prior to buying or selling an option, and for the complete risks relating to options you might read the “The Characteristics and Risks of Standardized Options” (link). This material has been prepared by sales or trading personnel that may interact with external trading desk personnel, sales personnel and other constituencies for the purpose of gathering, synthesizing and interpreting market information.