The markets are still edgy and uncertain. So what's an investor to do? Stay in gold.
Despite its recent volatility, it's the one investment that benefits during times of uncertainty. It does well during good times and bad. That's been true throughout history, and it still is.
This year, the US national debt has already reached 87.5% of GDP. It's expected to hit 93% this year and over 100% of GDP within five years, a far steeper increase than almost any other country, says the IMF.
The rule of the thumb is that over 90% of GDP a country stagnates and it doesn't move ahead.
Considering that the U.S. is issuing new debt this year that's nearly equal to the rest of the world combined, the picture remains pretty dismal. So we need to be prepared for what's to come.
This tells us that hard times are coming. If so, then what we've seen in recent years has been an intro to the years ahead. The gold price reached yet another record high in June, rising 12½% so far this year.
Considering it's risen 45% since April 2009 without much of a correction, the recent weakness could turn into a downward correction, especially considering the Summer months tend to be slow months for gold.
If further weakness develops as we suspect, it will provide a great buying opportunity.
We have recommended buying physical gold consistently since 2002. When SPDR Gold Shares
(GLD), the gold exchange traded fund began trading in 2004, we recommended it as well.
We also started buying physical silver in 2002. And like gold, wheniShares Silver Trust
(SLV), silver's ETF started, we recommended that too in 2006.
We've owned Eldorado Gold (NYSE: EGOEGO)
and Central Fund of Canada (AMEX: CEF)
since 2003-04 and continue to hold these issues.
Even though it's been many years now, we are still very bullish and we continue to recommend keeping your positions and buying new ones gradually over the Summer months to take advantage of weakness.