Does gold continue its bull market towards $1,500?

August 5, 2016 03:04 PM

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My analysis shows that gold will be implemented to protect global purchasing power and minimize losses during our upcoming periods of market shock. It serves as a high-quality, liquid asset to be used when selling other assets would cause losses. Central banks of the world’s largest long-term investment portfolios use gold to mitigate portfolio risk in this manner and have been net buyers of gold since 2010.

Investors should make use of gold’s lack of correlation with other assets, which makes it the best hedge against currency risk. There was a huge trend change in U.S. gold investment last May 2016. Switzerland is now a major source of U.S. gold exports. The tables turned back in May 2016 as the Swiss exported a record amount of gold to the United States. There has been a huge increase in gold flows into the global gold exchange-traded funds.  Something seriously changed in May 2016 as the Swiss exported more gold to the U.S. in one month than they have every year for several decades.


 

Though we are in for a period of great financial turmoil, investors can safeguard themselves by investing smartly in gold. Do not be left behind and see your dollar assets lose value. Invest in gold!

It is in these conditions gold is the only investment that will appreciate in time.

The world including Russia, Syria, Libya, North Korea, the South China Sea, Venezuela and social discord from Europe to the U.S., it is difficult to make the case for any good news. Gold will continue to perform its role as a safe haven in these times of crisis, which appear to be never ending. The metals surge of as much as 8.1% on the day of the Brexit vote last month is an indicator that its’ luster of safety is undimmed in the current market. There's little to be gained from arguing whether such beliefs are right or wrong: “The market can stay irrational longer than you can stay solvent”.

The list of prominent hedge fund managers backing gold is lengthening. Paul Singer, of Elliott Management Corporation, is the latest name to lend his support. It is likely that more investment institutions will turn to gold as the logical way to countervail the effects of many years of quantitative easing.

"It's a glaring warning sign of deflation. We've never really had deflationary fears throughout such a widespread part of the world before," said Phil Camporeale, a multi-asset specialist at JPMorgan Asset Management.

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About the Author

Founder of AlgoTrades Systems., internationally recognized market technical analyst and trader. Chris is also the founder of TheGoldAndOilGuy.com, a financial education and investment newsletter service. He is responsible for market research and trade alerts for of its newsletter publication.