Gold has been making a quiet run these last four years while yesterday it crossed $1,800 per ounce for the first time since September 2011.
Gold’s cycle low was a little above $1,000 in December of 2015 so it’s gained almost 80% over the last 4 1/2 years!
The difference between today and September 2011 when gold hit an all-time record high of around $1,900 per ounce is that it’s been a much stealthier move this time around. What I mean is that back in 2011 everyone was talking about gold constantly whereas I don’t hear nearly as many pundits, or retail investors, talking about it today. This tells me that gold will probably set new record highs again as there may be more untapped fuel waiting in reserve. Typically, an asset tops out when EVERYONE is talking about it (remember Bitcoin?), and it just doesn’t feel like that same dynamic exists yet at this point.
Obviously, there will be a ton of volatility in the gold price as there always is, but I will not be surprised to see gold easily exceed it’s prior record over the next 5-10 years. I believe the moment gold really takes off is once the market realizes the Fed will need to continue printing money at an unprecedented scale to monetize massive government debts and support markets. However, note, this could be after a brief period of deflation first, which would typically be an adverse environment for gold in the interim.
This is why I’ve maintained, and continue to maintain, precious metals and gold miners in portfolios to compliment more traditional bond and stocks assets these last few years.
Disclosures:
Past performance is no guarantee of future results. All investments maintain risk of loss in addition to gain.
Data from third-parties is believed to be reliable but accuracy is not guaranteed. Much of the data used to interpret the markets and forecast returns are often at odds with each other and can result in different conclusions. Many different factors impact prices including factors not mentioned here.
This is NOT investment advice but merely a general commentary. Individualized investment advice cannot be provided until a thorough review of your unique circumstances and financial goals is completed.
Views provided here are current only as of the moment of posting and are subject to change at any time without notification.
