What Is The Best Investment Over The Next 5 Years?

The price of gold staged a spectacular rally in the first quarter of 2016. It gained in value by 17% (in terms of US dollars). This was its best performance in almost three decades, while significantly outperforming other major stocks and bonds.  We have now entered a new bull market for gold.

Gold is the safety net against the impending financial crisis in macro-economic risks, which are currently confronting us.

The economic outlook for public finances remains grim.  This so-called economic recovery still weighs heavily on monetary stimulus. Gold will, once again, return as the reserve asset throughout the world.

Gold is the only universally accepted currency, whose supply cannot be increased by public policy. Gold’s role as a safe haven asset during economic shocks has been well documented.

China and Russia have called into question the US dollar’s role as the global reserve currency. They have called for greater use of the IMF’s Special Drawing Rights (SDR).

Gold has a long-standing negative correlation with regard to the US dollar. 

Gold’s history as a monetary asset makes it shine as a store of value during periods of uncertainty. The debasement of the US dollar increases the cost of purchasing it.

This is a high-quality asset that can be readily liquidated during times of market stress. During the 2007 to 2008 financial crisis, the gold market remained extremely liquid throughout the height of the liquidity strain in other markets.

The global economies have entered a new and unprecedented phase in monetary policy making. Central banks in Europe, Japan and soon the US have now implemented Negative Interest Rate Policies (NIRP) to counteract deflationary pressures. US government bonds would be less effective than gold in mitigating risk, ensuring portfolio diversification, as well as allowing investors to achieve their long-term investment objectives.

NIRP will result in structurally higher demand for gold from investors, traders, and new central bank purchases. Negative nominal interest rates have both short-term and long-term consequences. Their effect will most likely not be felt by investors, traders, and central banks for quite some time yet to come! I expect that the demand for gold, as a portfolio asset, will structurally increase rather quickly. 

In the BIS Quarterly Review from March 6^th, the Head of the Monetary and Economic Department at the BIS noted that confidence in central banks was faltering. The recently increased turbulence in financial markets serves to highlight the need for portfolio diversification and effective risk management; which are tasks at which gold has traditionally excelled in!

Gold Strong Gold Buying Has Just Begun!

The economic heightened uncertainty is driving investors’ appetites into gold-backed ETFs.  Their holdings have increased by more than 330 tons worldwide (year-to-date). This increase is linked directly to negative-rate policies as well as the lack of effectiveness of quantitative easing (QE). 

Low And Negative Rates Will Boost The Price Of Gold

I believe that the prolonged presence of low and negative rates has fundamentally altered the way that investors need to regard, or think about, the risk. This will result in a much broader use of gold…so as to manage their portfolios more effectively and, thereby, preserve their wealth over the long-term. 

Since the 1970s gold has experienced five bull markets and five subsequent bear markets. Previous bear markets (excluding the current one) have had a median time frame of 52 months. During this time period, the price of gold declined between 35% and 55%. As of December 2015, gold’s price pullback was already in line with the median length and magnitude of these previous bear markets.  

*We are defining a bull market as a period where US dollar gold prices rose for at least two consecutive years -- and bear markets as the subsequent periods where the price generally fell for a sustained time. M=length in months. †Excludes the period from September 2011 to December 2015. Source: Bloomberg, ICE Benchmark Administration Ltd,

Gold mania is about to be unleashed! While global central banks are now implementing negative interest rates, this is the perfect scenario for gold to surge much higher.

The price of gold is rising even more due to the expectation of the next financial crisis.  Imagine how high the price of gold could go when the real crisis impacts world economies!

While central banks are trapped in their current scenario, I am now presenting you with a once in a lifetime opportunity in which you can prosper and profit by making an incredible amount of money.

How high can gold go?  I believe that it can go as high as $8,000 per ounce during a full-blown crisis!  With limited downside risk and huge profit potential, my subscribers will have the knowledge of that perfect timing as to when to purchase gold again - Gold is money!