Gold and the metals universe are all headed much higher. Stocks are hitting new record highs, bonds are up too, and things are looking good, explains Mary Anne and Pamela Aden, resource sector specialists and co-editors of The Aden Forecast.
For a long time, however, we’ve talked about the worrisome signs under the surface and how these could emerge at any time and undermine the situation. It’s been going on for years with no big upsets. But we would be remiss to ignore these signs and pretend that all is great.
It’s not. The biggest concern is the national debt because it just keeps soaring. In fact, it has gone straight up over the past 20 years, and especially since the pandemic arrived on the scene.
Then there’s inflation, which is surging. Inflation recently hit a fresh 30 year high. Adding fuel to the fire, producer prices soared 8.6% year over year. This tied for the highest ever and it’s a very big deal.
The Fed’s super easy money policies over the past couple of years have been the direct cause of inflation. Keep in mind, since March 2020, the Fed has added more than $4 trillion to its balance sheet. This is double the amount it was then, resulting in more money created than ever before.
The Fed has done this primary by buying $120 billion in U.S. Treasury bonds every month. Even though the Chinese and other international bond buyers have been selling U.S. bonds, it doesn’t matter. The Fed will keep buying.
It’s been a long time since inflation has taken center stage and many people won’t understand its characteristics or how best to protect themselves. The best way to combat inflation is by buying and holding gold and silver, and their shares.
The gold price has finally taken off, jumping up to a five month high. Gold is now headed toward its June high above $1900, and if surpassed we could see it test the August 2020 record highs.
Silver is looking great. It is the most tightly held of all commodities and investment assets. It’s been weaker than gold since last year’s peak, but this is now changing, especially with the new infrastructure plan ready to go.
The mining shares are equally on a tear, rising to a five month high, like gold. They’ve all formed an interesting bottom with great upside potential.
We have several years of a solid bull market ahead of us, and as an investor we want you all to ride it to maturity. The current bull will be six years old next month, which means we have 4-5 more years for this bull market to run its course, assuming the pattern continues.
Gold reached a record high in August 2020 during the heat of the pandemic, and now a renewed rise is starting, laced with inflation and too much debt. And if this bull ends up being similar to the previous ones, gold could soar well into the thousands of dollars per ounce.
Our gold and silver shares are doing very well, bouncing up from the lows. They have formed solid bottoms, and have room to rise much further. So far, the strongest out of the gate are Van Eck Junior Gold Miners ETF (GDXJ), Van Eck Gold Miners ETF (GDX), Wheaton Precious Metals (WPM) and Barrick Gold (GOLD).