Peter Krauth discusses the confluence of factors that points to the gold bull market having plenty of upside ahead. In investing, as in life, perspective is everything.
To some, gold at $1,525 as we started out 2020 seemed expensive. Today, it s trading at $1,940, producing a 27% gain.
And yet, from several viewpoints, gold still looks cheap at current prices. Debt, easy money and geopolitical risks are ever present. And these have all been tough on the U.S. dollar. Ongoing weakness in the greenback looks set to continue, providing a huge tailwind for gold prices.
So much, well beyond the kitchen sink, has been thrown at trying to support the economy and kick-start activity. Yet we can t ignore vital indicators. Negative-yielding debt levels, ongoing negative real interest rates and anemic money velocity despite exploding money supply mean rising hard asset prices look inevitable.