Gold will be implemented in order to protect global purchasing power and to minimize losses during the upcoming periods of market shock. Central Banks use gold to mitigate portfolio risk, in this manner, and have been net buyers of gold since 2010.
Investors should make use of gold's lack of correlation with other assets, which makes it the best hedge against currency risk. Last May, there was a huge trend change in U.S. gold investment as the Swiss exported a record amount of gold to the United States. Despite the fact that we are in for a period of great financial turmoil, investors can safeguard themselves by investing wisely in gold. Do not be left behind and witness your dollar assets lose value.
Gold will continue to perform its role as a safe haven during these seemingly never-ending times of crisis. The metal's surge of as much as 8.1% on the day of the Brexit vote last month is an indicator that its luster of safety is undimmed in the current markets.
The list of prominent hedge-fund managers who are investing in gold is growing. Paul Singer, of Elliott Management Corporation, is the latest name to lend his support. It is likely that more investment institutions will turn to gold as the logical solution to countervail the effects of many years of quantitative easing.
Soros Fund Management, which manages $30 billion for billionaire George Soros and his family, sold stocks and bought gold and shares of gold miners whilst anticipating weakness in various markets. Investors view gold as a safe haven, during times of turmoil but they tend to be late to the game as they don't buy gold until there truly is turmoil and gold will have already appreciated substantially at that point.
As the U.S. dollar falls from all of the Fed's continuation of loose money policies, it will lift up gold prices to unprecedented highs.
Golds' importance, even in today's environment, was clearly visible during the massive rally at the start of the year, when all other asset classes were tanking. Investors piled into gold on the scare of an imminent global financial reset.
Does Gold Continue Its Bull Market Towards $1,500?
The trend for ETFs to pile in to the precious metal sent the price of gold soaring by 25% in the first half of 2016, the biggest price rise since 1980. For the first time ever, investment, rather than jewelry, was the largest component of gold demand for two consecutive quarters. There will be another great opportunity in gold, silver and especially miners in the near future which followers of my work will benefit from.
This article is commentary by an independent contributor. Chris Vermeulen is full-time trader and research analyst for TheGoldAndOilGuy Newsletter.