The Age-Old Game of Economic Musical Chairs: Gold Always Gets a Seat

U.S. Global Investors  ( Original )
FEB 12, 2018

As multiple contributors (weak-dollar policy, massive debt spending, inflation) to a coming gold price rise continue to fall into place, it is worth checking the rear-view mirror and remembering how well gold has already performed over the past 10-, 20-, and 47-year (since the US went off the gold standard) periods:

Gold has been a reliable store of value and solid investment-return engine not just for decades, not for centuries, but for millennia. By holding it now, you not only set yourself up for a coming spike in price, but you get the security and assurance of the inviolable truth that gold has been an investment stalwart for thousands of years hence. And yet, it’s still so adaptable:

As I’ve explained many times before, gold has historically performed very well in climates of rising inflation. When the cost of living heats up, it eats away at not only cash but also Treasury yields, making them less attractive as safe havens. Gold demand, then, has surged in response. This is the Fear Trade I talk so often about.

Making predictions is often a fool’s game, but I believe that after lying dormant for most of this decade, inflation could be gearing up for a resurgence on higher wages and borrowing costs. Now might be a good time to rebalance your gold holdings to ensure a 10 percent weighting.

“This pick-up in inflation and inflation expectations is positive for gold,” says BCA Research, “which we’ve shown to be an attractive hedge against rising prices.”

ORIGINAL SOURCE: Fear Creeps Back into Stocks, Shining a Light on Gold at US Funds on 2/6/18