Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

Take comfort in gold’s long term fundamentals

Take comfort in gold’s long term fundamentals

Gold bulls, ourselves included, have suffered another disappointing year. Rather than ending 2016 on a strong note, the biggest surprise to many was the failure of gold to surge higher in the wake of Donald Trump’s election as the next president of the United States.

For a moment, as the polls closed on Election Day, we thought Trump’s victory would create the sort of uncertainty upon which gold typically thrives. Instead, contrary to expectations, Wall Street has since zoomed to new all-time highs and gold has yet again disappointed fans of the yellow metal.

One thing is for sure: In the short run, financial markets – including gold – dance to their own tune and short-term forecasts, even when based on serious analysis, are often wrong.

As I’ve said many times, I don’t like making short-term predictions about the future price of gold. People who do are usually very lucky or very wrong.

That said, although a low probability, I think there is a real chance this year that the price of gold will recover much of the ground lost since hitting its all-time high near $1,924 an ounce in September 2011.

Over the long term, however, fundamentals do matter . . . and, over the long term, we feel increasingly comfortable with our long-term bullish forecast of gold prices rising to unimaginable heights. If not this year, the chances of gold soaring will rise from year to year.

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