If you’ve held physical gold for the past five years, you’ve likely been frustrated by its lack of price appreciation. Of course, physical gold always retains its value as sound money and wealth “insurance,” but while prices of paper assets have flourished since 2013, the dollar price of gold has languished. That, it seems, is about to change.
At long last, gold, silver and all commodities appear poised for a price breakout in 2018 (and beyond) as the lower dollar, price inflation and higher interest rates that so many expected in 2010-2011 finally come to pass. In addition to those factors, several gold-specific positives have recently appeared, and they demand your consideration:
- Global gold demand is strong, with the only restraining component being western investment demand. Since western investors are typically trend followers, you’d expect low investment demand to appear at price lows. This is exactly what the recent Gold Demand Trends report from the World Gold Council showed when it was published earlier this month: https://www.gold.org/research/gold-demand-trends/g…
- Traditional technical and cycle analysis also augurs for a price bottom and trend change. Respected market analyst Tom McClellan recently declared the current cycle to be upward for gold, with the next three years providing some unusually strong price gains. You can read more of his analysis here: https://www.themaven.net/mishtalk/economics/eight-…
- In late 2017, many investors began to think of Bitcoin and other “crypto-currencies” as alternatives to gold. But with the recent sharp price correction and looming legislation to regulate (or even ban) crypto trading, the investment world is realizing that cryptos are not a replacement for a sound money strategy of holding precious metal. Instead, they are at best a supplement to a diverse portfolio.
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