Gold continued to march higher this week, crossing $1,800 USD per ounce for the first time since August 17th of 2011, the midst of the Great Recession.
Year to date, gold prices have realized a gain of nearly 30%.
The silver/gold ratio is at an astonishing 96:1.
Our opinion is that precious metals prices, including gold, will continue an upward trend for quite some time. We expect there to be periods of sell offs, potentially sharp, at some point. Yet demand is strong and drops will probably be met with strong buying.
There has been a staggering amount of financial stimulus that has been put into the US economy by the Federal Reserve due to the financial crisis of 2008-2011 and now, in 2020, due to the devastating effects of the global Covid-19 pandemic. We believe that there will have to be consequences to the strength of the US dollar, and the US economy, as a result of these unheard of monetary policies.
Additional uncertainties with regards to the pandemic and social unrest in America will most likely be increasingly significant in pushing individuals, investors, corporations and world governments towards a source of safety in the form of precious metals. Add to that, a highly explosive election year environment, and it does truly feel like America is a powder keg on many fronts.
We advise our clients to continue to hold gold as a good investment and form of portable tangible wealth. With rising prices, it does make logical sense to sell some positions and realize solid gains from recent price movement upwards.