Summer is just around the corner, but is it really 2017… or more like 1977?
Adrian Day, CEO of Global Strategic Management, says retirement investors need to pay more attention to historical periods like the late 1970s to see the future for gold. An interesting perspective when you consider that 1980 was one of gold’s best years ever (it jumped an astonishing 120%).
Why? In the late 1970s:
• America was recovering from a deep recession that included a crisis in leadership, slow economic growth and an energy crisis
• Inflation was on the rise, climbing to over 13% by 1980
• Gold prices rose from $133/oz in 1976 to $594/oz in 1980
• America is still feeling the effects of the devastating 2008 financial crash and Great Recession, combined with today’s angry political environment, sluggish economic growth and rising oil prices
• Inflation is on the rise and is already at 2.9% today. Day thinks it could be as high as 6-7% in the coming year
Day points out that gold has shown considerable resiliency in 2017 in the face of economic trends that would have previously been more detrimental to gold prices.
Rising oil prices, a rising dollar, an impending rate hike from the Federal Reserve, record-breaking stock markets and more have been in the news, but gold still out-performed the stock market in the first four months of 2017.
Regardless of where gold might be in the investment cycle, Day’s advice remains the same: make gold a core foundation of your wealth building strategy.
FRANK HOLMES: PRICE JUMP AHEAD ON OVERSEAS DEMAND?
Why buy gold now? Because gold’s current price level could be an opportunity to accumulate, says U.S. Global Investors CEO and CIO Frank Holmes. He predicts gold could rally in the double digits within the next 12 months.
Holmes’ forecast is based on the possibility of a negative geopolitical event, rising interest rates and/or anemic economic growth. But he is also cognizant of the ravenous appetite for gold in China and India: both major global players that account for 40% of the world’s population.
Gold prices in India have been supported in recent weeks because of higher demand for the annual Hindu and Jain holy festival of Akshaya Trtiya. According to the World Gold Council, Indian demand for gold rose 15% in the first quarter of 2017 from a year ago.
Mukesh Kothari, director of a Mumbai-based bullion dealer, thinks the current lower price levels for gold are attracting Indian retail buyers, while jewelry demand is positive for the wedding season.
Holmes encourages investors to have a 10% gold weighting in their portfolios and thinks temporary dips in gold prices could represent attractive trading opportunities for gold investors.
RJO Futures senior market strategist Philip Streible thinks that the jobs report this past week along with mounting geopolitical issues could be good for gold. According to Streible, if we see a big miss in the jobs report, followed by a more hostile situation in North Korea, then gold could see a complete turnaround and drive above $1,300 per ounce.
Societe Generale Head of Metals Research Robin Bhar thinks that gold could see a recovery following Emmanuel Macron’s win in the second round of the French elections held this past Sunday. According to Bhar, we could see a bounce in the yellow metal based on the classic “Sell the Rumor, Buy the Fact.” In other words, the gold market had already priced in a Macron victory.
TIME TO CONSIDER THE SAFETY OF YOUR RETIREMENT PLAN
If you’ve done the impossible and saved the small fortune necessary to retire with dignity in today’s America, it is not time to get complacent.
Consider how that hard-won success could be stolen from you in a sudden market crash in the next year or two.
According to a Forbes study, 56% of Americans said they have less than $1,000 in the checking and savings accounts combined. This is how the average American lives: steeped in credit-card debt, living paycheck-to-paycheck and at serious risk of ruin if the slightest thing goes wrong.
Don’t let this happen to your family or your heirs.
Gold is the safe-haven asset class you must own in your retirement portfolio. We live in confusing and tumultuous times, and buying physical gold and silver is one of the best ways to help firewall your future from inflation, war or the current crazy financial bubble.