For years, we had to hear those miserable gold bugs telling us how inflation was coming, and gold would be our savior, states JC Parets of AllStarCharts.com.
Well, inflation came in harder than at any point in over 40 years and gold prices fell. So, the same people who owned the only asset not making any money for an entire decade, got it wrong again. I can't believe it. So here we are, gold prices are pressing up against all-time highs again, now that inflation expectations have been falling off a cliff.
Why does it need to be a hedge against inflation? Why should the economic implications even matter to investors? Who cares?
Why not just own the stuff that's going up, and avoid the things that are going down? Gold prices are on the verge of breaking out of a historical base. We've been all over it and there have been plenty of opportunities in the space to profit. And while I appreciate all the kind words and nice emails about your recent gains in gold stocks, I still think this is just the beginning. I mean, when you look at the lack of progress that gold has made since its prior cycle's highs back in 2011, I think it makes sense to look at how well gold has done when you price it in the other currencies:
Look how far beyond those former cycle peaks gold has come when you take the US Dollar out of the equation. Now granted, we live in a US-denominated world, so it's the pricing in USD that matters most. But when you see what it's been doing in the other forex, the weight of the evidence suggests that it's only a matter of time before gold gets going in USD.
To learn more about JC Parets, please visit AllStarCharts.com.
