Latest posts by Michael Vodicka (see all)
- Gold up 16% in 2019 – I See More Gains Ahead - August 12, 2019
- Match Shares Jump 20% on Strong Q2 Earnings - August 6, 2019
- S&P 500 Second Quarter Earnings Expected to Grow 4.4% - July 19, 2019
For all the gold bugs out there – it’s time to start paying attention to gold again. After a nasty 8-year bear market, precious metals are moving back into a bull market.
The price of gold is up 16% in 2019. Take a look below.
That 16% gain in 7 months is interesting on its own. But even more interesting – gold is finally breaking out of an 8-year bear market that began in 2011. This looks like the beginning of a long-term reversal and new bull market.
Why is Gold Breaking out in 2019? Currency Devaluation
Central banks all across the world continue to devalue their currency to artificially stimulate their economies. One example is China, recently letting the Yuan hit an 11-year low to retaliate against US tariffs.
The US also recently lowered interest rates for the first time in 10 years.
Central banks in India, Thailand and New Zealand also recently cut interest rates.
The bottom line here is that we have a global, currency war accelerating where all the biggest central banks across the world are eager to devalue their currencies and print money to artificially stimulate their economies.
The end result – investors are craving an asset class with a strong history of protection against inflation and currency devaluation.
In that category gold has no peer. It has held up over thousands of years as a way to preserve wealth while thousands of currencies in fiat money have crashed and burned.
What Should We Expect Moving Forward?
I am expecting the trend of currency devaluation to accelerate in the coming months and years. That tells me gold should remain strong and in a bull market. On the chart, the breakout is big news. I see a new bull market emerging and I expect prices to remain strong for at least the next few years.
How do I Invest in Gold?
It’s pretty easy to invest in gold these days. One of the easiest and most effective is with an exchange traded fund called SPDR Gold Shares (NYSE: GLD). This etf is easy to buy through virtually any brokerage firm. It has low fees. And it tracks the price of gold pretty accurately.
DB Double Gold (NYSE: DGP) is an etf that offers 2X the price movement of gold. If gold goes up 1%, this etf is supposed to go up 2%. If gold falls 1% this etf should fall 2%.
If you’re into silver you can check out iShares Silver Trust (SLV) – an etf that tracks the price of silver.
The Big Picture on Gold
Gold is back in a big way with global centrals banks in a race to devalue their currencies – it’s time to start paying attention. There are plenty of good options that are both easy and effective ways to invest in gold.