It Looks, Sounds And Smells Like A Gold Bull Market

It Looks, Sounds And Smells Like A Gold Bull Market from Investment Research Dynamics

Gold tends to perform the best when the real rate of interest (interest rates minus the real inflation rate) is negative. For now, the Central Banks have been able to contain the movement of gold in order to prevent the price from doing what it should be doing when interest rates are negative.

With that enormous amount of negative yielding debt globally, and Treasury yields in the U.S. heading south quickly, from a fundamental standpoint there’s a high probability we have started the next big move higher in gold. Silver will eventually “catch up” and begin to outperform gold. That said, get used to a higher level of price volatility in the precious metals sector. Keep a core position but sell rallies and buy sell-offs if you want to trade the volatility. Otherwise, sit tight and be right.


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Dave Kranzler

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics. Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.