Gold Blows Past All-Time Record with Sights on $2,000

As the pandemic aggravates existing tailwinds, experts are detailing why the yellow metal – and silver too – can continue to rise. Here’s their reasoning.

gold silver soaring 7-27-20-3

The lauded $1,911 all-time high for gold prices that was set back in 2011 has not just been surpassed, but seems to be shaping up to become a stepping stone for a new record. A mere two years ago, the metal’s prices had bottomed out at around $1,200, and many were quick to call the record high from 2011 a one-off event that won’t be reclaimed in the foreseeable future.

Others, however, insisted that gold rests on exceptionally strong fundamentals in contrast to risk-on assets, and that the metal could be a single black swan event from soaring to new heights. Two years removed, and gold has indeed climbed by close to 50%, a staggering rise for a tried-and-true safe-haven asset.

The jump over the past week has been such that some analysts, such as Insignia Consultants’ chief market analyst Chintan Karnani, are betting on some form of price pullback. Yet Karnani doesn’t expect any correction to be significant, and sees the metal moving on to $2,000 before long.

Ross Norman, CEO of precious metals news and information provider Metals Daily, had predicted a precipitous climb for gold in December 2019, although he notes that the spike was quicker than expected. Gold has now broken out of its traditional tepid summer price movement for two consecutive years, lending credence to the notion that there is much more to the gains than just the global pandemic.

Norman, too, acknowledged that there could be a price pullback that will likely be met with an influx of buyers. He added that, unlike the precious metals market, the stock market’s gains appear to be disconnected from reality and are mostly running on sheer optimism. This idea is supported by the two asset classes abandoning their usual inverse correlation and moving up together.

In regards to the factors driving the monumental gains, Norman explained that the pandemic aggravated existing tailwinds such as an expansion of money supply, ballooning debt and negative real and nominal yields. George Gero, managing director at RBC Wealth Management, echoed Norman’s sentiment, adding the worsening of relations between the U.S. and China and election uncertainty to a mix that points to a long-running bull cycle for the metal.

Equally as important, silver prices have reached a seven-year high, climbing over $24 for the first time since 2013. The parallel move up is standard for the precious metals market and represents an important instance of silver finally catching up to gold. But those with a closer eye on both assets know that the gold-to-silver ratio is still heavily skewed in gold’s favor, and one cannot help but wonder if silver will soon follow historical precedent and post gains that eclipse even those of gold.

 

The Most Compelling Reasons For Owning Physical Gold

For thousands of years, precious metals have occupied a prestigious place in trade. In fact, the acquisition of these metals gave rise to the concept of market and currency. This is why precious metals such as gold have consistently retained their high value despite changes in economic climates. Precious metals will always have integral value because of their tangibility and rarity. Thus, a lot of people nowadays are becoming open to the idea of buying precious metals because of benefits, such as the following:

Image source: bizjournals.com

Image source: bizjournals.com

Hedge against inflation

For the past few years, gold’s value has remained strong despite fluctuating economic conditions. Analysts say these values are not showing signs of decline, at least not any time soon. As observed in the past, when prices of major commodities rise, the value of this precious metal also tends to rise. Gold could be one of the many ways to preserve wealth while beating inflation at the same time.

Balancing asset mix

Smart financial decisions involve diversifying asset ownership. With uncertain economic conditions, placing all assets in one basket (such as in stocks or real estate) may prove dangerous. Buying precious metals as an addition to paper assets can enhance portfolio stability and balance the overall asset mix. When all other asset classes decline, physical gold can be a reliable fallback.

Image source: ask.com

Image source: ask.com

Marketability and storage

High demand for precious metals means higher marketability. Gold may not be as liquid as equities but in its physical form—such as coins, bars, jewelry, and equipment—this metal is very easy to sell. In addition, because they are tangible assets, they can be taken into possession and be stored for a period of time. While in storage, their value can continue to rise.

Start building and preserving your wealth around gold now. Contact Birch Gold Group through this website.

Here’s Why You Should View Gold as Being “On Sale” Right Now

With the price of gold down in the past few years, one market watcher argues that current conditions present a perfect opportunity to buy some of the metal. Find out why here.

While many are rushing for the exit as the price of gold declines, some folk are making a different play: They’re buying. Why’s that? Writing for Forbes, Frank Holmes argues that they know gold is a safe bet in the long run – perhaps the safest – and see gold’s current status as ‘on sale’.

Recent sales of physical gold fully support with this, having already reached multiyear records and still on the rise. In contrast to the gold futures derivatives market, American Gold Eagle sales reached 161,500 ounces in July – the highest since April of 2013. Individual Americans aren’t the only ones still having faith in gold – the Fed maintains its 8,133 ton reserve, European countries are repatriating gold and Texas is in the process of creating its own bullion depository.

So what is beating the price of gold down? Holmes notes that conspiracy theories often abound when gold plummets. Price manipulation might not be such a stretch this time around, given some odd recent events. Last week’s five-ton sale on the Shanghai Gold Exchange (SGE) caused gold to experience a mini ‘flash crash’ for the first time in 18 months. The so-called bear raid was thought to have been caused in China, but later information pointed towards New York as the culprit.

Yet another conspiracy theory focuses on the relatively mild interest in gold as a safe-haven asset during the Greek crisis. This has led some to speculate that European central banks possibly sold gold down, likely making the crisis seem less severe in order to dissuade people from turning to the yellow metal for protection.

Regardless of the veracity of these claims, Holmes says that gold’s long-term status remains untouched thanks to two key demand drivers: What he calls the “Love Trade” and the “Fear Trade”. The Love Trade refers to gold purchases for weddings, anniversaries and cultural events; these intensify in the wake of upcoming holidays, especially ones in Asia, such as Diwali and the Chinese New Year. The Fear Trade stems from available money supply and real interest rates turning negative, a scenario seen beneficial for the metal – current positive real interest rates have been acting as a headwind for gold.

But can gold benefit with a looming interest rates hike? Regarding the hike, Holmes says: “With a struggling global economy and commodity deflation odds favor rates will not rise soon in America, and gold will revert back to the mean.”

For all the latest on physical precious metals and financial news, be sure to check out our blog.

U.S. Economic Anxiety Rises As Big Name Retail Chains Continue to Close Massive Quantities of Stores

All over the U.S., retailers big and small are closing dozens – or even hundreds – of their stores. Why is this happening and, more importantly, what does it mean for the future of the country’s economy?

Michael Snyder, the man behind the Economic Collapse Blog, is not the only one who thinks this is a sign of sinister things to come. Middle class families have long been the main driving force behind the economy, thanks to the ‘spending money’ they could put aside from their incomes. But now, as the middle class is being “systematically destroyed”, as Snyder puts it, consumer spending just isn’t there anymore.

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Photo Credit: ronaldhennessy via Compfight cc

Large and well-known retailers like Abercrombie & Fitch and Barnes & Noble will have closed hundreds of stores by the end of 2015. Sure, part of that could be attributed to the rise of online retailing, but that’s far from the real culprit behind struggling sales: lack of money to spend.

A troubling statistic sheds light on why people suddenly have less – if any – money to spare. An analysis performed by Enterprise Community Partners revealed that one out of four American citizens now spends half of his or her income on rent. With the rest being spent on things like groceries and gas, it’s not hard to see why little is left for discretionary spending.

This situation sounds bad enough, but Snyder believes the worst is yet to come. He quotes Thad Beversdorf’s belief that consumer spending is showing “the initial signs of a severe pull back” to strike an unpleasant point: the current trajectory of our economy is eerily reminiscent of the build-up to the collapse of 2007/2008.

Snyder concludes by wondering: if thousands of stores are being closed already, what will things look like when an economic crisis truly hits the U.S.? “Once it does, the business environment in this country is going to change dramatically, and a few years from now America is going to look far different than it does right now,” he warns.

Why Birch Gold Group?

The Birch Gold Group Difference

Birch Gold Group is a leading dealer in precious metals, serving all of the United States with our unrivaled knowledge, customer service and personal attention. For an easy and comfortable way to purchase gold, silver, platinum and palladium, and to discover how to plan for your future with precious metals investment, Birch Gold Group is your only choice.

Birch Gold Group was founded in 2003, and since this time, the company has helped countless clients safeguard their financial futures with a thorough education in precious metals investments. Birch Gold Group prides itself not just in providing a wide selection of precious, but also in the education, individual attention and overall satisfaction that they offer to their clients. This is the Birch Gold Group Difference, and this is why they are the leader in precious metals dealing.

Motivated By Your Success

Birch Gold Group works every day to set itself apart from the countless other precious metals dealers by providing a superior level of attention to its clients. Their elite team of IRA specialists and investment professionals listen attentively and work tirelessly to suggest a tailored investment solution for each client. Where other dealers are motivated by sales transactions,Birch Gold Group is motivated by client satisfaction and success stories.

Serving Beginners to Expert Investors

Due to its philosophy of not using sales gimmicks or high pressure tactics, Birch Gold Group is able to give every client the same high level of service and personalized attention. Whether you are a beginner precious metals buyer, a skilled investor, or you’re just looking to safeguard your financial future; you will receive the same level of superior service, respect and attention. It is thanks to these principles that Birch Gold Group has operated under for the past 10+ years that they have achieved their success in the industry.

Visit their official webpage at www.birchgold.com