Recent studies indicate gold could be about to go on a significant rally, according to an American commodities expert. This is good news for people who have been focused on investing in gold, or for those who have been thinking of getting started.
There had been some people familiar with the gold investment market who had suggested gold had reached its bottom. Prices have been hovering around the $1,200 an ounce level. But Jim Cramer, known for his program “Mad Money” on CNBC, says gold could be setting itself up for a “monster rally,” and all investors and potential investors should take note.
The price of gold still hasn’t reacted to the current trade wars happening between the United States and foreign nations, rising inflation levels and the massive budget deficit currently facing the United States.
Gold investors haven’t been bullish lately
The latest Commitments of Traders Report, a weekly report issued by the Commodity Futures Trading Commission, provides some insight into the positioning of speculators and shows that the largest players in gold investing have reduced their futures in gold to the lowest levels they’ve been in years.
Cramer says that it is true that the big-money speculators in gold investing have been quite negative in recent years, but probably too negative in his view, which is perhaps why gold could be set for a big boom.
He also pointed to the last time CFTC numbers were as low as they are: December 2015. Shortly after that time, gold exploded to have a massive rally, and investors rode that wave.
Of course, as always, past performance is not at all a guarantee of or even necessarily indicative of future results. However, it’s still good to have some precedent to point to when trying to predict the future of investments, including precedent in the form of seasonal patterns.
While one shouldn’t necessarily place all or even most of their money into gold based on these speculations, it certainly is worth diversifying your portfolio and using gold to hedge against some of the other riskier investments you might be considering. Gold is not nearly as volatile as many stocks, and if you’re looking to take some risks with up-and-coming investments, it’s absolutely helpful to have some stable investments to counteract that.
For people who are genuinely worried about trade policies being set by the federal government, rising rates and increasing levels of inflation, there’s no need to dump stocks at this time, but it can still be a good idea to purchase gold as a form of insurance to protect yourself against any potential economic catastrophe. In these uncertain political times on both national and global levels, that investment may very well pay off more than you even expect it to.
If you’re interested in learning more about the state of the gold market and why gold investing can be a solid choice for you to protect your wealth, contact Gold Wealth Financial with any questions you have. We look forward to working with you!
- by Steve Hunt
Categorised in: Gold Investing