Bob Moriarty: We Just Witnessed A Major Capitulation In Gold Stocks – Investment Watch investmentwatchblog.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from investmentwatchblog.com Daily Mail and Mail on Sunday newspapers.
Indicators are pointing to gold and mining ETFs running out of breath. They don’t seem to have what it takes to the move to the finish line. Despite gold, silver and mining stocks’ recent corrective upswings, the precious metals are running out of steam. After bursting off of the lows – while failing to recognize that it’s a marathon and not a sprint – the precious metals’ late-week breather signals that their stamina isn’t what it used to be. Moreover, with false breakouts and sanguine sentiment causing an adrenaline rush that’s likely to fade, the precious metals’ transformation from stalwart to sloth could leave investors feeling increasingly dejected.
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.