Start of a bull run for gold?
Since the beginning of 2016, gold price had seen a meteoric rise of 21%. It rose from USD1061 to USD1292 per troy ounce at this point of writing, representing an incredible come-back by the yellow precious metal. Is this the start of a bull run for gold?
Traditionally seen as a safe asset class, the surge in gold price is due to the poor economic climate. The combination of oil crisis, China stock market crashes, negative interest rate policy by Bank of Japan and weak global growth currently make gold an attractive commodity for investors to hold. After all, it has been regarded as a safe haven for decades during economic downturns and sky-high inflation.
If you are one of those who think that the current market climate is doing “fairly okay”, then perhaps you have not been following the news or you must be an extremely optimistic person. The matter of fact is that many businesses are finding it challenging to operate under the current climate and the global market is basically waiting for a Black Swan event to implode. By then, it will be too late for you to liquidate your stocks and transfer the fund to gold because very often, the stock market moves very swiftly.
Like all investments, you must adopt a contrarian approach in order to make money. Gold has fallen from a high of USD1825 per troy ounce in August 2011 and it is likely to be at an inflection point of an upward curve. Thus, in my view, the best time to buy physical gold bullion is now because it is in an upward trending cycle. In fact, local finance blogger, Dave, predicted that gold will storm to USD2400 level this year. A very bold prediction I must say but then again, it …
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