By Jeff Clark – Casey Research
There are a number of reasons why many of us believe gold stocks will shoot for the moon before this bull market is over – they’ve done so many times in the past… the gold price still has a long way to climb… and producers are generating record revenue and profits. But I think there’s another reason why gold stocks will soar – one that hasn’t dawned on many in the industry yet. Continue Reading
If you own gold, or have been considering buying it, then you’ll have certainly noticed how the precious metal has been somewhat in the doldrums for a while – hovering around the $1600 range.
So the pressing question is: “When will gold move higher, and more importantly exceed its previous high?
Jeff Clark has some ideas in: When Will Gold Reach a New High?
If you’re holding gold, or have been considering buying it, then the price movements over the past week may have given cause to pause – perhaps. But there is always more to the “picture” than is first apparent, as Jeff Clark discusses in his article:
Are You Tempted to Sell, or Eager to Buy?
One of the pernicious results of inflation is that stuff gets more expensive. Or to put it another way, the dollar in your hand today buys a lot less than a dollar did 10 years ago.
If you had put $10,000 in a savings account 10 years ago, given the trajectory of interest rates and deductions for taxation, you would not be sitting on a lot more right now. However, during that 10 years the price of everything would have gone up – so your savings would in fact be worth less than before.
Jeff Clark looks at this reality and offers a way to measure the real gains of any form of investment – by comparing it to gold over the same period. It’s well worth a read!
Start Thinking in Terms of Gold
With gold moving up and down daily, but with no clear direction in sight, it’s reasonable to ask if gold is still a valid vehicle for investors.
Bud Conrad, of Casey Research, gives his considered analysis and opinion in:
Is Gold Still The Answer For Investors?
Where are gold and silver headed? That’s a good question and one that many people are asking. But as Jeff Clark notes in his interesting analysis, gold and silver could have a long way to go. In fact, if the price of gold and silver is adjusted for real inflation, as reported by Shadowstats, and compared to their 1980 highs – then they could go as high as $15,234 and $348 per ounce respectively. Food for thought.
The big news of the moment is that Switzerland has abandoned their free-floating currency and has sworn to stop the franc from rising. The SNB has stated they will buy unlimited amounts of foreign currencies in order to stop franc from appreciating – and from throttling their own economy.
Recently, it’s likely billions of dollars have been pouring into the “safe haven” status of the franc, only to get an instant “haircut’ on the announcement of this news. In fact the Swiss franc fell 9% instantly.
This is just part of the inevitable “race to the bottom” for government issued paper currencies.
Started by the US (and its quantitive easing or QE) other nations are now attempting NOT to be a safe haven. Why? Because when money surges into such a currency it naturally appreciates, pushing up the value of such a currency. And that, in turn, causes exporters to suffer pain, as everything they sell costs more in foreign markets.
Which currency is next? The Australian dollar? Fact is, whatever currency is perceived as safe haven, no longer really is. Why? Because at any moment the central bank of that country can make a decision to peg/devalue its currency to avoid further rises – causing instant losses to those who have parked their money there.
All that remains now is gold. Gold is the only “money” which can absorb unlimited upwards valuations without any government devaluing it by “QE”. No government can control the price of gold, hence by a process of attrition gold will become the safe have of choice – as the paper currencies eat each other up. In other words, the market is forcing gold into its historical role – as a truly global money.
With gold continually on the rise, many are asking about the best way to participate in the gold market. There are many different ways, of course, but gold ETFs warrant special attention and explanation.
Doug Hornig delves into the workings of such ETFs, and in particular looks at GLD and its performance as compared to physical gold.
Tracking Gold
Have you considered what will happen to your portfolio―and all the other areas of your life―if the dollar fails? The ramifications will be widespread, painful, and inescapable if you’re not properly diversified.
Jeff Clark has some answers and suggestions
Most people would have noticed the continuing rise in the price of gold, but not many also realise how silver has outperformed its more well-known “cousin”. More importantly, most people don’t understand what is driving silver’s dramatic rise.
Jeff Clark has some insights in his essay: Are We Running Out of Silver?
