Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Trend Forecast 2024 - 15th June 24
Gold Price Consolidating at High - 15th June 24
NVIDIA Stock Market: Price Prediction for the Future - 15th June 24
When Will the Boom/ Bust Rollercoaster End? - 15th June 24
Stock Market Trouble Lies Ahead. Are You Ready For It? - 15th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

When Will Gold Price Finally Take Off Again?

Commodities / Gold and Silver 2012 Sep 12, 2012 - 11:19 AM GMT

By: Jeff_Clark

Commodities

Best Financial Markets Analysis ArticleJeff Clark, Casey Research writes: Gold's pullback a year ago no doubt shook out a lot of nervous buyers. They got in on the rise, they got nervous on the pull back. They sold, and they lost.

That's just the way the market works.


But it's a shame, because when we look logically at gold's historical performance – for example over the last 12 years – we see that holding their nerve, tough though it can be, will most likely turn out to be the best approach, and for good reason.

Look at gold prices for the last five years.

You can see, despite the pullback, that the trend is clearly heading up.

But to get a feel for when the current pullback will end and to understand what we can expect when it does, consider these three key reasons you should be considering gold in your portfolio mix:

1. Gold is an inflation hedge.

Our economy has been flooded with paper money and national debt has skyrocketed.

At the same time, the dollar is being actively devalued in order to repay that debt.

To you and me, it means that sooner or later inflation – real inflation – will hit us hard. It's just a matter of when, not if.

Historically, as I discuss in my report The Three Best Ways to Invest in Gold, gold has been the number-one way to protect yourself from inflationary times.

If we are heading toward a period of high inflation, as it seems clear we are, then gold should play its part in protecting you when it arrives.

2. Gold is a dollar hedge.

As we come out of the summer and straight into elections, the chance of any big plan for reducing pressure on the dollar is slight. Problems caused by negative interest rates, debasement from bailouts, debts, and money printing are all pushing the dollar lower.

Yet gold has risen against the dollar, euro, Swiss franc, Canadian dollar, and British pound every year since 2000. The following list shows gold's rise from then, priced in US dollars (gains listed are year over year).

2000 – $271.50

2001 – $278.10 (gain of 2.43%)

2002 – $347.50 (gain of 24.96%)

2003 – $415.20 (gain of 19.48%)

2004 – $437.10 (gain of 5.27%)

2005 – $516.60 (gain of 18.19%)

2006 – $636.00 (gain of 23.11%)

2007 – $833.30 (gain of 31.02)

2008 – $880.80 (gain of 5.7%)

2009 – $1,095.60 (gain of 24.39%)

2010 – $1,421.60 (gain of 29.76%)

2011 – $1,566.40 (gain of 10.19%)

Those numbers show a solid, unbroken, and global bull market.

3. The US dollar has inflation baked in the cake (and so do many other currencies).

Because the Fed continues to pour money into the economy, it's difficult to say for certain when gold will make a dramatic move. But when inflation hits home and people start to question the value of paper currency, then people will turn to history's premier safe haven – gold.

Getting your timing right is tricky. If you buy today, gold may still go down. You could hold off buying and watch the price take off. The important thing to realize, though, is that the overall trend is clearly upward.

Currency dilution is a key factor, and signs –including growing expectations for another round of economic "stimulus" from the Fed soon – tell us that it is coming. When headlines about gold start showing up on the evening news, it will be too late. By then, of course, prices will be moving fast, so logically, the time to get in is now.

There are three ways to invest in gold as prices take off once more: Owning physical gold; owning "paper gold"; and finally – where the life-changing profits can come from – owning the right gold stocks.

Getting your strategy right, and doing it sooner rather than later, is the key.

© 2012 Copyright Casey Research - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 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