Gold Grants One Last Buying Opportunity
Gold prices remained lower this week despite fading optimism over Pfizer's coronavirus vaccine and a record number of coronavirus cases in the U.S.
But the vaccine really wasn't the only thing pulling down the price of gold over the past few days.
Last Friday, November 6, the price of gold rallied to a six-week high as the U.S. dollar fell and the pound sterling rose.
Gold Prices Three Months
The British pound jumped to its highest levels in two months after the U.K. announced it would pump another £150 billion (US$195 billion) into its economy amidst a second lockdown across England. That was 50% higher than economists anticipated.
But that little rally last Friday wasn't expected to be long-lived — at least I didn't expect it to be long-lived. In fact, I even wrote to you last Friday:
It's likely the pound sterling will remain strong today on the back of the announcement. But by Monday morning it's also likely there will be a million new factors pulling the currency in a million different ways.
So the gold rally on the back of a stronger pound might be a bit short-lived.
Of course, there was no way I could have known about Pfizer's coronavirus vaccine announcement. But that's exactly what happened.
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So there are really two things weighing down on gold prices this week. And only one of them — Pfizer's coronavirus vaccine — is really being recognized by the mainstream financial media. That makes for a pretty great buying opportunity in my eyes.
Although I really don't expect to see much action from gold until the end of December or beginning of January, I am still highly confident the price of gold is positioned to head north of $5,000 an ounce sometime next year. Everything we've been writing to you about gold's hyper-bull market still holds water.
So I suppose you don't need to own gold right this second. But I'd urge you to buy much sooner than later. We're already halfway through November. The new year is only weeks away.
What gold investments should you own?
Honestly, it doesn't matter.
Mining stocks, bullion, ETFs... investors are going to make a killing on all of them. Of course, some investments will see much higher gains than others. But basically any gold-related investment is going to do very well next year.
Remember all the hype over Bitcoin? Any kind of crypto- or blockchain-related investments went bonkers. It wasn't just physical Bitcoin itself.
There was that iced tea company that saw its stock jump over 200% simply by adding “blockchain” to the name of the firm. That's the kind of euphoric buying madness I expect to see in the gold market next year.
The mainstream financial media will call it a bubble. But by that point we'll already be holders.
Or you won't.
It's up to you now.
Until next time,
As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bull and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.
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