Seeking Alpha/Clif Droke/2-7-2020
“The takeaway from falling real yields is that there will be plenty of liquidity in the months ahead, and the Fed will almost certainly be forced to maintain an accommodative monetary policy in the foreseeable future. This is certainly good news for gold investors since non-yielding gold typically does well in a falling interest rate environment due to the diminished competition from lower-yielding bonds. What’s more, since falling rates suggest that economic growth will remain sluggish in the intermediate term, this is another fact that justifies owning long positions in gold bullion and gold ETFs as a hedge against future economic uncertainty.”
USAGOLD note 1: Coins and bullion are the choice for most private safe-haven investors. ETFs are the province of big funds and institutions interested in making a price bet. “Well, I worked on Wall Street and in the hedge fund industry for decades,” wrote James Rickards recently. “I also lived among the players in New York and Greenwich, Connecticut, at the same time. I’ve met the top hedge fund gurus in private settings. And here’s the thing: I’ve never met one of them who does not have a large hoard of physical gold stored safely in a nonbank vault. Not one.” Institutionally, in other words, the big fund managers own ETFs. Personally, they own the physical metal in the form of allocated coins and bullion.
USAGOLD note 2: We can only hope that the word “coronavirus” fades as quickly from the headlines as it appeared.
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“Independent analyst Ross Norman is the most bullish of all the analysts who turned in their gold price forecasts for 2020 to the LBMA. He set his low price at $1,520 an ounce, his high price at $2,080, and his average price at $1,755. The most bearish gold price forecast for 2020 comes from Bernard Dahdah of Natixis. He set his low price at $1,300 and his high price at $1,450. His average price stands at $1,398 an ounce.”