When is the right time to be conservative with Gold ?

Weekly Newsletter April 25 , 2019

“ Be fearful when others are Greedy and Greedy when others are fearful “ – Warren

We can't assume it will be a smooth sail for the rest of 2019, so what does that mean for you as an investor if you need insurance for your portfolio? The best way to protect yourself from economic chaos is by owning some gold now, and this is something I’ve been saying for years. When the sells got extreme in December, gold prices rose by 5%, and it's continuing to edge higher historically. When other asset class become volatile, investors love crowding into gold. Every time something big happened, that made investors nervous, like the Fed's decision about their bond buying practice, gold spiked. If you're looking for an insurance policy against volatility, gold is a great way to go. I like the stock market more than I did now that the Fed has supposedly decided to be more patient, but the whole point of diversification is to be prepared if something goes wrong, not right. There are a ton of factors, domestic and abroad, that could cause absolute turmoil in our markets immediately.

However, I’m not the only one that has been pushing the precious metal as an investor haven.

Goldman Sachs Group Inc. analysts, led by Jeffrey Currie, raised their price forecast for gold, predicting that over 12 months the metal will climb to $1,425 an ounce -- a level not seen in more than five years, Bloomberg reported bullion has benefited as rising geopolitical tensions fuel central bank purchases, while fears of a recession helped boost demand from investors seeking “defensive assets,” they said.

Bullion-backed exchange-traded funds are expanding, with holdings rising to the highest since May.

“Speculative interest in gold signals investors are not only closing bearish bets but are also adding to bullish positions, Suki Cooper, an analyst at Standard Chartered,” said in a note.

Gold is also getting a boost from mounting speculation the Federal Reserve may pause in raising borrowing costs, boosting the appeal of non-interest-bearing metal, However, on the flip side, if Powell even suggest the possibility of a rate hike the markets instantly begin plummeting.

“We expect the safe-haven qualities that only gold possesses, along with the metal’s amazing ability to hedge against inflation, to remain key drivers of the metal’s price in 2019, complemented with a resurgence of physical demand,” Cantor Fitzgerald, analysts led by Mike Kozak, said in a report.

Gold and silver are “looking good in 2019,” underlining a potentially positive indicators that “should drive a very bullish case for both metals.”

To be sure, lingering trade-war uncertainty and fears of stalled global economic growth have enlivened expectations for higher prices among gold bulls, who believe that purchases of so-called haven commodities among investors will accelerate as riskier assets, including stocks, exhibit more volatility in 2019.

“The gold trade is booming at a faster pace than we’ve seen since 2008-2009 as investors’ appetites are growing quickly. Indeed, the climb in geopolitical concerns are behind what is now developing to be a new bull run. We continue to look for higher prices and think a breakout above $1375 is around the corner,” wrote John Stashi, chief market economist at Spartan Capital Securities, MarketTrends reported.

Here at Big Thicket Coin and Bullion we like to live by the motto, “Prepare for the worst and Pray for the best.” That’s exactly what we’re recommending each of us do. So, don’t wait for the storm to hit before you get prepared, like so many of our clients who have been with me since 2008 did. Get ahead of this thing so that you can get the rest you need for a world that needs you.