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Forbes/Stephen McBride/06-16-17
Gold got crushed in the post-election rally, but a little over five months into 2017, the yellow metal is up 10.5%—making it one of the best-performing assets of the year so far.
While the outlook for the US economy is more positive than it was 12 months ago, if we zoom out for a moment, the big picture “ain’t so rosy.”
Gold has historically done well in times of uncertainty and panic… and with these seven worrisome signs, there could be plenty ahead.
#1: Interest Rates Are Still Near Record Lows
#2: Bonds Offer Measly Returns
#3: Dividend Stocks Aren’t What They Used To Be
#4: Economic Growth Is Anemic
#5: The Federal Debt Has Exploded
#6: The Dollar Has Lost 87% Of Its Value
#7: We Are Overdue For A Bear Market
…Gold bullion has proven to be a store of value and a reliable wealth preservation tool over many centuries… unlike the dollar. In the event of a stock selloff, it can serve as “portfolio insurance.”
PG View: Gold dropped nearly 12% from election day to the low in mid December on optimism that the Trump administration was going to stoke the U.S. economy with deregulation, tax cuts and infrastructure spending. Since then, the yellow metal has rallied back as the Trump reflation has been stymied at nearly every turn. As optimism fades, the chances of a recession and the overdue bear market for stocks becomes increasingly likely. Right now, gold remains quite inexpensive.
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