Third, GLD broke below a long-term moving average at the tail end of 2011. Ever since, the exchange-traded yellow metal tracker has struggled to reassert itself.
If you look back at analyst commentary when the spot price of gold had been closing in on $2,000 per ounce, there were far more bullish comments on gold than bearish ones. After 2012's lackluster showing and 2013's decimation, though, bearish gold commentary has become the norm. Today, more "cowbell" monetary stimulus has become synonymous with piling into riskier assets. Meanwhile, Fed tapering of its bond purchasing program is now viewed by the majority as confirmation of a robust economy as well as de facto tightening that strengthens the dollar while weakening gold.
I see things differently. Whereas many believe China and other emerging markets are unable to get their collective ducks in a row, I anticipate an increase in demand for the yellow metal from emerging regions of the world.
Second, the increase in geopolitical tensions from the Russia-Ukraine conflict to the Israeli-Palestinian bloodshed to Syria/Iraq is likely to create greater demand for gold by institutional and individual investors.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts