Fed Fears Create Opportunity for Knowledgeable Gold Buyers

Guest Post from Goldco Precious Metals

Is “Accepted Wisdom” the smart gold buyer’s secret weapon?

Everybody knows when interest rates go up, gold goes down. It’s just common knowledge. Except you know what? Everybody’s wrong.

The accepted wisdom has long been that when rates are low, gold booms. But the minute rates climb everyone’s going to dump their precious metals, tanking the price in the process, and zip into some nice interest-bearing bonds, CDs and more. But it turns out some of gold’s lowest points have been during periods when interest rates were similarly scraping the floor, and vice versa.

So you have to ask yourself two questions: First, should you ever blindly accept investing wisdom because “everybody knows” it to be true? Probably not – especially when that counsel might be coming from an advisor with an axe to grind. You say your broker never recommends gold to you? It may be because he (or she) doesn’t have any to sell you, or because they don’t really understand the precious metals market. If that’s the case they may, either deliberately or through blindly following group-think, be giving you rotten advice.

If you don’t want to miss an opportunity, investigate the rationale being given to you for shutting the door on one of the market’s most stable investments. Also think about what information and education you can obtain that will give you a more well-rounded understanding of this key asset class.

You might also ask yourself why, if gold isn’t a crucial strategic asset you should be including in your portfolio, how come central banks worldwide are scrambling to get more of it into their stockpiles? Why is China, struggling with a down economy and a faltering yuan, not only fighting for a spot on London’s legendary Gold Fix, but establishing its own Shanghai Gold Exchange, launched in April 2016 with a benchmark price denominated in yuan? How can it be that such a hotly pursued asset has no place in your portfolio? It might be time to reconsider your options, and learn the lesser-known but far more accurate indicators of gold’s price potential.

Thank you James Cordelaine

 

Gary Christenson

The Deviant Investor

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