For my conservative Top Pick for the coming year, I’m buying gold through the ETF Sprott Physical Gold Trust (PHYS), reports Omar Ayales, resource sector specialist and editor of Gold Charts R Us.
The global economy continues to muddle thru Covid-19. Most countries are still recovering from the most severe economic lockdowns in 2020 due to Covid-19; many extended lockdowns thru 2021 and to this day.
And it’s largely in part due to people on a mass scale becoming conscious of their own vulnerability. This new consciousness is also fueling changes in the work force. People are making lifestyle choices that are very different from recent years.
Working at least part-time from home is a new must for many job seekers. The increased job openings and record quit rates are pushing employers and businesses to adapt to new tendencies.
This mega shift in social awareness is creating supply chain bottlenecks; these shocks are pushing commodity prices higher. The increases in costs are already seeping into consumer prices. Time will tell how long consumers will tolerate rising prices; and thus, how long can prices remain at higher levels.
The continued rise in inflation is also likely given the debasement of currencies globally; it has been happening for years but was been aggravated during the Covid-19 crisis. Out of the U.S. billions of dollars, have been given to people to spend.
The conditions are very favorable for risk-off assets, particularly gold, U.S. treasuries and the U.S. dollar, as well as other safe havens like utilities and solid dividend earners.
Gold, in particular, reached a bottom in March 2021 and has been up-trending since. It has a key resistance at $1925; and if this level is broken, gold could continue rising, initially to the August 2020 highs near $2100.
Last year my conservative recommendation were gold and silver. Over the past year, gold has fallen about 5% and silver a 10%. Interestingly, just after we had announced our recommendation, during the month of March, gold and U.S. treasuries bottomed and have since been on the rise, or at least forming a strong base and support level.
As an added idea, in addition to recommending gold through Sprott Physical Gold, I would also recommend that conservative investors own silver through the Sprott Physical Silver ETF (PSLV).
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A Look Back at 2021's Top Performers
Last year, Omar Ayales chose Ivanhoe Mines (Toronto: IVN) as his Top Pick for 2021. Here's his latest update on the company:
Last year my recommendation was Ivanhoe Mines. The rose nearly 50% from the beginning of January 2021 to the end of December 2021 and could remain strong moving forward. I continue to hold positions in the shares.
