Gold is set to achieve its greatest annual gains since 2010, and it’s just the beginning of what could be a record-setting bull run. If the current gold price holds up through the end of the year, gold will have gained about 15% in value over the course of the year, the highest annual increase since 2010, when it increased by 30%. But the fact that this great performance is coming in the face of a “strong” economy is what makes it so much greater.
With stock markets at record highs and unemployment low, many who take a cursory look at the US economy think that things are going well. While many of us understand that the corporate debt bubble, rising national debt, and trouble in repo markets are all indicators of a looming recession and stock market crash, that crash hasn’t occurred yet. So naturally we would expect that, with stocks booming, gold wouldn’t be doing so hot.
Yet gold has far outperformed even the most bullish analysts’ expectations. Consensus forecasts for the gold price in 2019 were for it to hit $1,350 per ounce. Yet gold surpassed that long ago, rising above $1,500 earlier in the year and currently hovering around $1,475.
That’s because so many investors understand that stock markets are in a bubble and that markets will crash within the next year or two. They understand that they need to protect their retirement savings and investment assets, and they understand that gold is the best way to achieve that protection. That has driven up gold demand, which in turn has driven up the gold price.
The best part about gold’s rise in price is that it isn’t over yet. If gold is increasing this much while stock markets are doing well, just imagine how well it will do once stock markets finally begin to plummet. We got a glimpse of that in 2008 and subsequent years, when gold skyrocketed in the face of a stock market crash and a major financial crisis. The next time around, with stock markets facing potentially an even larger crash, gold could go far higher.
If you haven’t already invested in gold, what are you waiting for? The writing is on the wall that stock markets are overvalued and due for a correction. It’s a matter of when, not if, they’ll crash. Are you going to keep sitting on the sidelines until your retirement accounts start losing tens of thousands of dollars, or are you going to invest in gold today?