Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Most Exciting Biotech Stock Of The Year? - 17th May 21
Gold Mining Stocks Fundamentals - 17th May 21
Junior Gold Miners Should be Rallying – What’s Holding Them Back? - 17th May 21
Stock Market - Should You Be In Cash Right Now? - 17th May 21
Learning the Financial Markets - 17th May 21
INVESTING IN HIGH RISK TECH STOCKS - ALL OR NOTHING - 16th May 21
Is Stock Market Selling Madness About Over? - 16th May 21
Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
Budgies Birds of Paradise Indoor Grape Vine Singing, Chirping and Flying Parakeets Fun 3D VR180 UK - 16th May 21
Wall Street Roiled by Hot Inflation Data: Is This REALLY “Transitory”? - 16th May 21
Inflation Going Stag - 16th May 21
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold is the Ultimate Safehaven as Mega Shift to Hard Assets Continues

Commodities / Gold & Silver Feb 04, 2008 - 03:18 PM GMT

By: Aden_Forecast

Commodities Best Financial Markets Analysis ArticleGold Record Highs Keep Coming!
Gold surged above $850 to new record highs as the new year began. This is exciting but gold could become even more exciting now that it's in uncharted territory.


GOLD: The little known jewel...
Most investors haven't been paying much attention to gold. Even though it's gained 28% consistently each year on average since 2001, the mainstream generally hasn't noticed.

Last year was not an exception. Gold gained 33% in 2007, which was almost five times the gains in the Dow Industrials. But surprisingly, the majority are still focused on stocks. We think that's going to change, probably this year.

Record highs always attract attention. When this happens, the market will usually start getting more media attention, investors take note and they start asking questions.

Case in point… our mom isn't interested in the markets. But recently for the first time in years she asked us about gold hitting a new high because she read about it in the local newspaper.

...AND A STRONGER PHASE HAS BEGUN

This “mom” barometer is a good one and you can bet that others are now looking at gold too. New highs attract new buyers, propelling the market quickly higher. It's very likely that gold's upward momentum will now continue to build and if it does, it wouldn't be unusual for gold to approach $1000 in the current upmove.

We'll see what happens. But as you can see on Chart 1 , by breaking above its 1980 high at $850, gold's potential is wide open. It's entering a stronger bull market phase and technically, gold could keep rising until it reaches the top of its nearly 40 year mega channel.

This of course could take time but that may end up being gold's ultimate upside target in this long-term, primary bull market, which has so far taken gold from $255 in 2001 to $930. And gold may go even higher if it breaks out of its channel like it did in 1980.

If that sounds crazy, it's not. Keep in mind that prices aren't what they used to be. In other words, gold would have to rise to about $2200 when adjusted for inflation to equal what $850 was in 1980 (see Chart 2 ). So it's all relative.

BULLISH BACKGROUND FOR GOLD

The main factors driving gold higher has been the record high oil price, along with the huge rises in food and other commodities.

Aside from oil, the price of wheat and soybeans, for instance, nearly doubled in 2007. This has fueled inflation concerns, which pushed gold higher because it's the ultimate, historical inflation hedge.

The turmoil in the credit markets has also been bullish for gold. Since it's widely expected that this will result in even lower interest rates to help boost the economy, it'll mean an ongoing U.S. dollar decline. And since gold and the dollar move in opposite directions, the declining dollar has been a big plus for gold.

GOLD IS THE ULTIMATE SAFE HAVEN...

Gold has also risen due to its safe haven status in reaction to growing international uncertainty and tensions, especially in the Middle East . But there's more, and we believe these new factors could also be important in fueling gold's bull market rise this year and beyond.

First, are the new developments in China , which has just become the world's second largest gold consumer. That is, Chinese demand is growing and in recent years we've seen what's happened to many markets when Chinese demand intensifies… they soar.

Plus, China just opened up gold futures trading and the exchange is prepared for big demand. With the Chinese stock market softening, one top fund manager expects China 's wealthiest investors will pour into the gold market, driving the price much higher.

...AND DEMAND IS GROWING

If gold ETFs are any indication, this could very well happen. streetTRACKS Gold (GLD), for instance, now has the eighth largest gold holdings in the world. And in the third quarter of 2007, ETFs bought 15% of all the gold produced.

Plus, inflows into these ETFs surged over 600% compared to a year earlier. That's very impressive and it's also establishing a solid foundation for gold's bull market.

MEGA SHIFT TO HARD ASSETS UNDERWAY

The rise in gold is part of a larger phenomenon that's been sweeping the globe. It involves a mega shift that happened in 2000 from financial assets like stocks, to hard assets like gold, other metals and commodities. These mega shifts are rare. They don't happen often and they tend to last about 20 years.

As you know, the rise in commodities has primarily been driven by the booming growth in China and other emerging nations in recent years. This has fueled massive demand for all commodities.

As these countries continue growing and expanding their infrastructure, it's going to keep pushing these markets higher in the years ahead and we believe that'll be the main factor behind this mega, multi-decade upmove in commodities, which in turn will keep upward pressure on gold.

CLIMATE CHANGE: An influence

Another factor is climate change. This too well likely become increasingly important in the years ahead, especially driving food prices higher.

The year 2007 again broke records for natural disasters, which have become more common over the past decade or so. Unfortunately, the world has been very slow to take action on global warming, despite all the evidence and emerging facts.

Last year, for instance, England had it hottest April in nearly 350 years and there were droughts in Asia , Australia , Africa , the U.S. and Europe . Dry weather pushed soybeans to a 34 year high, and it drove up the price of corn and other commodities (see Chart 3 ). Again, we'll likely be seeing more of this in the upcoming years.

The point is, gold has been a super, consistently profitable investment for years. It's in a long-term bull market rise. The major trend is clearly up and it's strong. The fundamentals are solid, the technicals look great and as long as that's the case, gold is headed much higher.

By Mary Anne & Pamela Aden

Mary Anne & Pamela Aden are well known analysts and editors of The Aden Forecast, a market newsletter providing specific forecasts and recommendations on gold, stocks, interest rates and the other major markets. For more information, go to www.adenforecast.com

Aden_Forecast Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in