The latest reports indicate gold prices could hit all-time record highs in 2019, with the possibility of reaching as high as $5,000 in the not-too-distant future. For what was once a relatively unloved asset class, gold investing has now become a powerful tool for people interested in alternative methods to the stock market and various types of traditional portfolios.
The rising prices of gold are important when you consider the falling value of the U.S. dollar, which could result in significant declines of stock values. There are some experts who believe that as the dollar declines and gold continues to increase, gold could actually replace bonds as the go-to hedge.
This is some significant momentum for gold, which hit its highs in 2011. Gold is set to clear $2,000 very soon, at which point a powerful bull market is expected to drive its price even higher.
Traditional portfolios not performing as well
For the most part, people still rely on traditional portfolios with stocks and bonds. However, these traditional portfolios are not expected to continue protecting investors, especially when the next economic downturn happens. At this point, gold could very well replace bonds as people’s go-to hedge source.
Gold could get to as high as anywhere from $5,000 per ounce to $10,000 per ounce, as a multi-year bear market in the U.S. dollar and equities unfolds, but the first big milestone is to hit $2,000 and see what happens from there. However, right now, all indications are that gold continues to have a bullish trajectory, and as it continues on its upward path, the gold miners will continue to push this momentum.
The gold bull market began back in 2000, when gold was trading at just $250 an ounce. Many companies specializing in silver and gold mining are breaking out from some base formations that lasted multiple years, and now they’re on track to bring in significant earnings over the next five to 10 years as the market for gold gets even stronger.
Compare this to traditional equities, bonds and the U.S. dollar. Stocks are expensive these days, but debt levels are higher than they’ve ever been as well, with interest rates being significantly lower. The stock market has gone up by 167 percent from 2012 to 2018, and U.S. Treasuries added about 40 percent from 2013 to 2016 before they fell about 20 percent from 2016 to 2018. The U.S. dollar added 32 percent from 2013 to 2017 before declining 15 percent over the last 15 months.
Obviously, it’s better for everyone if the treasuries and the USD stabilize, but right now they are falling, which means it is almost certain that the stock market will follow. The pace at which that decline occurs could rapidly accelerate at just about any moment, with little notice at all.
Therefore, investors would be wise to pursue gold, which is more of a sure-thing investment right now in a time in which the U.S. dollar and treasuries are in a state of flux.
Contact Gold Wealth Financial today to learn how to get started with gold investing!
- by Steve Hunt
Categorised in: Gold Investing