(401 G.C. QUICKNOTE Tues. May 3rd, 2022) – On the metals… one positive aspect, especially when compared to other assets like stocks and Bitcoin, is that gold managed to hold its value and grow in 2022, rising 3.6% year-to-date.
“The long-awaited big gold rally could still be on its way. The gold price – currently just under $1,900 – has, at least, displayed some stability since the turn of the year,” he said. “It may be all that gold needs is a bit more time. Poor returns from equity market shares have unsettled investors recently, and any lack of improvement could spark moves into other asset classes. like gold and silver. It’s also worth remembering that gold / silver always has the potential to help shield investors when the world throws us a curveball.”
In comparison, U.S. stocks have been selling off for most of April and Bitcoin is down 13% year-to-date.
“Bitcoin – which also headlines as a store of value – has tracked a volatile path that looks suspiciously similar to the fall then rise then fall again of U.S. technology stocks,” Smith said. “Events that could still further derail shares and bonds include: interest rate rises having unforeseen knock-on effects in emerging markets, or another outbreak of international tensions, for example, starting in the South China Sea or Iran.”
NOTE: Gold and the metals could actually get a huge inflow of money from the crypto market, especially if it keeps falling like it has this year.
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Another trigger that could push gold prices higher is the reported decline in the supply of the precious metal, which fell by 1% in 2021, added Smith, citing a sharp decline in recycling offsetting increases in mine production.
“Historically, supply falls – for example, between 2000 and 2008 – have preceded multi-year bull markets for gold, although there’s no guarantee this will happen again,” he pointed out.
Fidelity International’s note on gold comes just days after Fidelity Investments became the first retirement plan provider in the U.S. to offer Bitcoin as an option in 401(k) accounts.
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com