Gold on a 10 Year Run
It is amazing that gold has been up 10 years in a row. To date the gain is over 460%, yet the general public still has yet to participate in a meaningful way. Most of the buying to date has been central banks and institutional buyers. In fact the talking heads are still condemning gold saying it is a relic of the past. They are denouncing the one true money. One that has a track record of over 5,000 years!
I believe that one of the main reasons that gold is ignored or bad mouthed by the talking heads is because it is a no vote to paper money, a system in which the whole world functions. I think that the main stream media thinks buying gold coins is like saying I don’t believe in stocks, bonds, banks etc. But owning gold doesn’t preclude anyone from owning all of those assets. Owning gold merely protects your overall position.
There is still opportunity in this gold bull market. To put it into perspective, during the last gold bull market of the 1970’s gold ran from $35 to $850 per ounce. That is 24 times your initial investment. Today’s gold bull market has only increased 5.5 times your initial investment, from $255 to $1,430 per ounce. To reach the equivalent of 24 times the initial investment gold will have to run to $6,120 per ounce!
Great bull markets do not just end over time, they end in a great speculation or panic phase. One in which everyone wants in and everyone is buying. Values skyrocket and the bull market ultimately ends in exhaustion. That is how I ultimately believe this bull market will end, in a massive speculative phase. We are poised for it. Less than 3% of the public owns gold. What do you think will happen when everyone you know wants in?
The interesting difference with the gold bull market of today and that of the 1970’s is that today the rest of the world is getting involved due to the global economic crisis and fear of fiat paper. China and India are buying gold in hundreds of tons per year.
If you don’t own gold, it’s not too late. If you already own gold hold on to your positions as there seems to be much higher values on the horizon. If for no other reason, protect your assets from the falling dollar. The money printing here in the US has gotten out of hand.
We believe that everyone deserves a properly developed strategy for financial safety.
Lynette Zang
Chief Market Analyst, ITM Trading