The British vote to exit the European Union has proven to be the catalyst for a coming financial meltdown (the end of the world as we know it). The revolt against globalism is spreading like an uncontrollable forest fire.
Currencies are collapsing worldwide versus the US dollar, the Euro and Pound close to parity, the yen less than a dime, the Mexican Peso less than a nickel, the Chinese Yuan devalued for a third time in less than a year.
Gold has now firmly established itself as a world currency. The five year bear market has clearly reversed and its price is up 26% this year from $1,054 to $1,330. When the panic move into the US dollar subsides, gold will be the logical safest haven.
The retail public response has been puzzling. During the past month’s $150 gain in the gold price, we have experienced net liquidations (more selling than buying). Obviously gold is being bought in record amounts as witnessed by large volumes of ETF purchases and futures trades. Some very large hedge funds, managed by George Soros, Stanley Druckenmiller and John Paulson, just to name a few, have now taken huge positions in gold and gold stocks. If it’s good enough for their money, it should be good enough for some of ours. Reasons to buy metals are still the same – long term safety, tangibility, portability, liquidity, and anonymity.
One should ignore the prognostications of the financial media, which has for years been forecasting $1,000, $700, even $400 gold.
Just start acquiring it while you can. Day to day price fluctuations will continue to be volatile. When the panic starts and supplies are limited or non-existent, it won’t matter what price per ounce you paid.
There is still time!
Source: Bloomberg, various ETF websites, UBS