The price of gold is rising as we approach the December FOMC meeting and another possible rate hike.
In fact, the metal closed at a five-month high earlier this month.
But this week will be pivotal for the price of gold, and here's why...
At its core, gold is two things: wealth preservation and financial insurance.
So when the head of the world's biggest hedge fund recommends an allocation of 5% to 10% in gold, investors should listen.
Ray Dalio is founder and Chief Investment Officer at Bridgewater Associates, the world's largest hedge fund, with some $160 billion under management.
Dalio is great macro thinker who's highly respected. More than that, he gets rare results: His firm has averaged 13% annual returns since its founding in 1975.
Back in 2015, Dalio said, "If you don't own gold... there is no sensible reason other than you don't know history or you don't know the economics of it..."
And then in October, Dalio said that because there's so much debt around, the major currencies, stocks and bonds attached to that debt have become riskier.
He told The Economic Times gold is a diversifier, which should represent 5% to 10% of an investor's portfolio. He even suggested to go higher as we move into the latter part of the business cycle.
There's no denying that gold has languished so far this year, but that's not a reason to sell.
After all, you don't cancel your homeowner's insurance just because your house hasn't burned down.
We're faced with two likely events in 2019: the next recession and the end of the bull market in equities.
Volatility is likely to pick up along the way, and that should help propel gold to significantly higher levels.
There are multiple reasons why gold's bull market is far from over, and why we're likely see a sizeable advance in 2019.
Let's look at each of these. Then I'll tell you where I think gold is headed in 2019...
Last week might've been a short trading week, but it was packed with the sort of financial news that sends the price of gold higher.
This latest gold rally pushed the metal to a fresh five-month high and close to a new breakout level.
Let's take a look at how the week unfolded and where I see the gold price heading next...
The price of gold just managed to tread water last week, but a weakening dollar could give gold a fresh boost in December.
Now that U.S.-China trade tensions have cooled off after the summit and the Fed all but confirmed a December rate hike, the wind might be coming out of the dollar's sails.
And that could be very positive for gold prices in 2019...
As the price of gold continues to fight to for a breakout above $1,230...
Gold's dip attracted safe-haven buying as well as short covering, causing the metal to bounce back.
Just when it looked like the price of gold was going to retest its lows of October and maybe even September, the metal put on a bold rally.
After marking an intraday low of $1,196 on Tuesday, Nov. 13, gold prices took one more day to consolidate near those lows.
Since then, the price of gold has rallied and so far maintained a healthier level near $1,220. The run happened as stocks continue to struggle while the dollar retreats.
A renewed surge in strength for the U.S. dollar sunk gold prices over the past week, but we're about to enter gold's strongest season of the year.
As the U.S. Dollar Index (DXY) made a renewed run to about 97.50, stocks and commodities suffered the consequences.
Investors already know how important the dollar is to gold prices, and this last week proved just how true that is.
The dollar's wild ride ended up giving gold prices a big boost last week. Now, worries about the next recession could feed increasing demand for the precious metal, which makes right now an excellent entry point.
I'll show you exactly why in today's gold price forecast.
What happened in gold prices over the last week is going to become more commonplace.
Just last week, I said to watch for a break above $1,235 for a possible confirmation that a new gold rally was at hand.
We're almost there now, and I'll show you the latest gold chart pattern to show you exactly why...
Although gold prices consolidated last week, they've found a new higher level.
The latest gold price rally is finally breaking out like I've been expecting, and it's not slowing down soon.
But now that we've gotten this substantial jump in the gold price, will it be able to hold, and what should we be looking for next?
As we crossed the end of September, the sentiment on gold prices was about as bad as it can get.
But investors are finally getting a reminder of gold's wealth-building potential.
Gold prices get a boost when instability rises. And more instability is on the way...
The widely anticipated September Fed rate hike is now behind us.
And the market's reaction, at least so far, has been right out of the textbook.
The dollar is up, and gold prices are down.
But we know what happens next...
Gold prices continue to do what I've been expecting, as gold trades just north of $1,200.
But there's a case to be made that the gold price will only move higher.
With gold prices still trading tightly in the $1,200 price range, the yellow metal can't seem to gather any momentum.
But that's about to change.
