Exactly Why Gold Is Up and Will Keep Going Up
Tuesday, March 15, 2016 1:11
% of readers think this story is Fact. Add your two cents.
Don’t make this complicated… The story is simple:
When both gold and paper pay you zero-percent interest, you should prefer gold over paper.
Today, gold pays you zero-percent interest, and so does paper money. So gold is going up. Pretty simple.
Let me show it to you visually…
As the chart below shows, over the long run, investors would rather hold gold than paper when “real” interest rates are negative. And investors would rather hold paper than gold when real interest rates are positive. (“Real” interest rates are interest rates MINUS inflation.) Take a look:
(Our friend John Doody – the editor of the excellent Gold Stock Analyst newsletter – runs this chart all the time.)
As you can see, in the 1980s and 1990s, gold did nothing. At the same time, real rates were extremely positive… Investors chose paper over gold.
But in the 1970s, and for much of the 2000s, gold performed extremely well. At the same time, real interest rates were mostly negative.
Today, the real interest rate is negative… Short-term interest rates are 0.3%, and inflation is at 1.4%. So you want to own gold.
Today, the situation with negative interest rates has reached an extreme…
“About a third of global government debt is already paying negative interest rates,” Rudi Fronk, the CEO of Seabridge Gold, explained to me on the phone earlier this month. “That’s nearly $9 trillion worth. Central banks are paying negative interest on their deposits in the eurozone, Japan, and Scandinavia.”
In short, in a world of negative interest rates, gold should outperform…
Yes, gold has run up in 2016… but I feel strongly that the move in gold is just getting started…
Nobody is buying… yet. So that helps me think that we are closer to the bottom than the top.
Gold may have peaked around $1,900 per ounce back in 2011… but it took investors until 2013 to give up on gold.
This next chart tells this story… It is a “real-money” indicator for us – it is the dollar value of the money in the SPDR Gold Shares Fund (GLD), the main gold exchange-traded fund (ETF). Take a look:
You can see that the money in this fund fell from a peak around $80 billion in 2011 to a trough near $20 billion at the end of 2015.
This tells me that investors gave up on gold – that gold finally became extremely hated, particularly in late 2015.
Then, it all changed…
You can see the change in 2016… Investors are getting back into gold again.
We have a perfect setup…
Gold is cheap, down $700 from its highs. It’s hated, as everyone gave up after 2013, and nobody is back in yet. Lastly, the uptrend has returned this year. We have everything I want to see in an investment.
Best of all, now is the optimal time to own gold… Remember, when both gold and paper money pay zero-percent interest, investors prefer gold over paper.
Right now, paper money is paying you zero… it’s time for people to own gold…
Make sure you get your money there first…
Good investing,
Steve
Editor’s note: As Steve showed you today, now is the perfect time to own gold. And when it comes to investing in the world’s best gold stocks, there is no one we recommend more than Gold Stock Analyst editor John Doody.
John’s track record speaks for itself. From 2001 to 2015, gold stocks fell more than 10%… but John’s proprietary gold-stock strategy returned 369%, turning every $10,000 invested into nearly $50,000. Until midnight tonight, you can sign up for Gold Stock Analyst for nearly HALF OFF the normal retail price. Learn more here.
Source: http://www.stansberryresearch.com/dailywealth/3226/exactly-why-gold-is-up-and-will-keep-going-up
Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Please Help Support BeforeitsNews by trying our Natural Health Products below!
Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST
Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!
HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.
Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.
MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).
MOST RECENT
HELP KEEP NEWS FREE
DONATE
HERE
| Online: | |
| Visits: | 1,602,253,730 |
| Stories: | 8,146,730 |
Wanted: Citizen Reporters,
Whistler Blowers, Insiders
Whistler Blowers, Insiders
"Not by might, nor by power, but by my spirit, saith the Lord of hosts." Zechariah 4:6
Today's Top Stories
Featured
Top Global
Top Alternative