Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • AI Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    • Postcards
Login Archives Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • AI Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    • Postcards
    ×
  • Subscribe
Enter stock ticker or keyword
×
Join 100,000+ Like-Minded Investors Today
Twitter
Tags: Gold

The Price of Gold Is Poised for Its Biggest Rally Yet in 2019

By , Money Morning • September 17, 2019

Start the conversation

Leave a Reply Click here to cancel reply.

You must be logged in to post a comment.

With the price of gold finally hitting pullback mode, some pundits are calling for an end to its rally.

First, we'll show you why they're wrong. Then I'm going to share some of my favorite gold stocks to ride the coming wave.

The gold price might be in a correction phase, but it's preparing to soar over the next few years. And this ascension is coming sooner than you think.

Gold is up 15% so far this year, even after its recent pullback. The S&P 500 is ahead slightly more than gold at 16% year to date.

But consider that stocks have been rising for over 10 years. And gold prices are only in a renewed bull market since 2016. For now, they're still 20% below an all-time high.

My point is that bond and equity markets are very mature, while the precious metals bull market remains in its early days.

Gold is still the ultimate insurance in a questionable global market. And it's at a discount right now, so get ready...

Why the Gold Price Is on Its Way Up

Last month, I told you that gold prices could be due for a rest. Their relentless climb since late May went from $1,280 to $1,550, a 21% jump.

The correction over the past two weeks has relieved the price of gold from some of its overbought condition.

Recent Commitments of Traders (COT) reports told us that gold price speculators held well over 300,000 net long contracts, the highest in about three years. Meanwhile, gold hedgers (smart money) were more than 337,000 contracts net short, which was likely an all-time record.

Watch Now: Serial entrepreneur Neil Patel reveals how to achieve the American Dream... for as little as $50. Click here...

That was strong indication that gold was due to pull back in the near term. And that's exactly what I told you in my last update, when I said "gold could correct before it marches higher."

Gold could still lose some altitude before it resumes its climb. But there are several solid reasons gold is still closer to the beginning of a massive bull run over the next few years.

U.S. interest rates, especially in the near term, are likely to stay low. The market is currently pricing in 90% odds of a 25-point rate cut at the Fed FOMC meeting next week.

And now Trump is exerting more public pressure on the Fed, possibly even calling for negative interest rates. His reasoning is that it would help lower the nation's borrowing costs. It would also boost competition with Europe and Japan, which are already there. The takeaway here is that, with nearly $16 trillion in negative-yielding sovereign bonds, the United States could clearly follow.

And that would greatly lower the opportunity cost of holding gold.

In recent months, we've heard the likes of uber-successful fund managers, like Ray Dalio and Jeff Gundlach, explain why gold needs to be in everyone's portfolio right now. And now BlackRock, the world's largest asset manager, with $6.8 trillion under management, is just the latest in a string of high-profile fund managers calling for gold exposure.

Rick Rieder, BlackRock's chief investment officer, says investors need to hold gold as protection from aggressive central bank easing. He also said central banks will actively debase their currencies, pulling bond yields much lower and sparking larger currency wars.

The third major reason to hold gold right now is that central banks are buying it hand over fist. Back in 2010, we saw a sea change. As you can see in the below chart, that's when central banks became net buyers of gold. For more than a decade prior, they had been consistently large net sellers.

Last year, they bought the most in over 50 years, now on pace to buy even more. Who else than central banks would know better that currency debasement is coming on a huge scale?

Now, let's look at recent gold price action. Then I have a couple of gold investments for you to keep your eye on, so hang tight.

The Dollar Will Keep Weakening

The dollar has pulled back lately, probably thanks to a likely September rate cut by the Fed. But for now, the DXY remains well within its rising trend channel and above its 50-day and 200-day moving averages. See the chart:

And we can see from this next chart that gold's just had its first significant pullback since May:

The recent action relieved overbought pressure, but it may not be done correcting.

So far, gold's drop has been about $60, or 3.8%.

If gold falls further, I'd expect to see the $1,475 level as the first support around the 50-day moving average. Below that, the next support appears to be near $1,425.

But now the European Central Bank has just announced it's easing rates on the deposit facility by 10 basis points to -0.50% and restarting its bond purchase program. With that news, and the Fed set to cut rates next week, $1,500 could well remain the floor.

As for gold stocks, they're back at levels last seen in mid-July, having corrected like I suggested last month.

But after some correction, you can expect a new, long-term rise. Here are my top picks for gold stocks to watch in the meantime.

These Are the Best Gold Stocks to Watch Now

Here Are 10 “One-Click” Ways to Earn 10% or Better on Your Money Every Quarter

Appreciation is great, but it’s possible to get even more out of the shares you own. A lot more: you can easily beat inflation and collect regular income to spare. There are no complicated trades to put on, no high-level options clearances necessary. In fact, you can do this with a couple of mouse clicks – passive income redefined. Click here for the report…

Claim My Free Report

Subscribe
Login
Notify of
guest

guest

0 Comments
Inline Feedbacks
View all comments


Latest News

September 15, 2023 • By Shah Gilani

We're Headed for a Second Banking Crisis - Here's What to Do

September 14, 2023 • By Tom Gentile

Tulips Are the Secret to Trading the Next 300% Rally in AI

September 14, 2023 • By Chris Johnson

Tulips Are Telling Me How To Trade the Next 300% rally in AI
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Penny Hawk Midday Momentum
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Quantum Data Profits Flashpoint Trader Darknet Alpha Accelerators Brutus Alerts Resource Traders Alliance L.A.U.N.C.H. Investor Rob Roy Trader Long-Term Equity Profits

© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz