Editor's Note: We believe that it is not possible for our readers to hear about gold too much or from too many people in this environment. Mary Anne and Pamela Aden, leading resource sector experts and editors of The Aden Forecast, suggest in this article that gold has always been, and still is the world’s favorite safe haven. We suggest you take in what they have to say, and if you want to read more, you can subscribe to The Aden Forecast here…
The Aden Forecast: What's Next for Gold?
By Mary Anne and Pamela Aden
Even though it may seem like it at times, it’s not the end of the world. Yes, the economy is going to suffer, but we don’t yet know how bad it’s going to be. For now, the world’s big central banks and governments are doing all they can to keep the financial system working and intact.
Emergency financing is needed all over the world. The Fed, for instance, is printing money like mad. They’re also buying tons of U.S. government bonds, mortgage backed securities and now corporate bonds. The end result is that the Fed’s balance sheet is now at new record highs and it’s headed a lot higher.
This in itself is going to create a buffer that will keep things from getting as bad as they might, at least initially. If so, it’ll end up fueling a big inflation down the road, but it seems that all agree we’ll cross that bridge when we come to it. The bottom line, this is a major event that’s going to change many things. So keep your gold and be prepared for whatever comes our way.
The gold price had a wild ride too. It started with dumping gold to cover other losses in the markets. Then safe haven demand stepped up causing havoc in the physical metals market. Premiums exploded upward while gold production closed at some of the Mints. Other Mints sold their entire inventory in record time.
Plus, mines around the world are closing. As our favorite gold dealer said, “March has been the most intense weeks in his 40 years in this business.” Physical gold had the biggest demand. Likewise for silver. The fast paced timeline was head-spinning for the markets and our lives. The fastest change ever.
The ratio of gold to stocks jumped up above its mega 80 month moving average, to favor gold for the first time since its high area in 2011. The trend since 1999 and this ratio have confirmed a mega trend change favoring gold.
With gold above $1,536, it’s on its way to the 2011 highs! And indeed if gold breaks and stays above $1,700, this target could be reached sooner than we think! Gold will surely be volatile as the pandemic evolves, but look at this as time to get set for the major rise should weakness occur.
Gold is the strongest precious metal, reaching another high recently. It reached a record high versus silver and platinum. And it’s positioned to rise in a several year rise ahead. This year will likely continue to see volatile moves with the ebbs and flows of the virus, and don’t be discouraged by this.
Silver is cheap and it’s a great buy now if you want to add to your positions. We recently bought more gold and silver including SPDR Gold Trust (GLD) and iShares Silver Trust (SLV).
Keep your gold shares position as well. We continue to hold position in Royal Gold (RGLD), Agnico Eagle Mines (AEM), Pan American Silver (PAAS) and Eldorado Gold (EGO).