by Doug Casey, Casey Research:
A “perfect storm” has hit the gold market…
Longtime readers know Casey Research founder Doug Casey has been warning of another major financial disaster for years. According to Doug, the financial hurricane that made landfall in 2008 never left. It’s been hovering above us, gaining strength.
Doug now thinks we’re exiting the eye of the storm. When the trailing edge hits, it will trigger a crisis “much more severe, different, and longer lasting than what we saw in 2008 and 2009.”
He’s encouraged anyone listening to buy gold, the ultimate safe haven asset. If you took Doug’s advice, you’re likely sitting on big gains.
The price of gold has surged 27% this year. It’s beat global stocks 6-to-1. Gold hasn’t done this well in years.
Today, we’ll explain what’s driving gold prices. As you’ll see, folks are piling into gold at the fastest pace ever. And there’s no reason to think this buying mania will end anytime soon.
• Gold is having a historic year…
Over the first six months of this year, the price of gold surged 25%. According to the World Gold Council, gold had its best start to a new year since 1980.
Record “investment demand” caused gold to take off.
If you’ve been reading the Dispatch, you might find the phrase “investment demand” odd. After all, we don’t consider gold an investment. We think of it as real money.
For centuries, gold has preserved wealth because it’s unlike any other asset. It’s durable, easy to transport, and easily divisible. Unlike paper currencies, it’s survived every financial crisis in history. It’s the most reliable store of value on the planet.
When the World Gold Council says “investment demand,” it’s talking about gold coins, gold bars, and gold ETFs… basically anything but jewelry.
Frankly, it doesn’t matter if you call gold an investment or real money. The point is that folks are buying gold at the fastest pace ever.
• Investors bought 1,064 tons’ worth of gold during the first half of this year…
That shatters the previous all-time record.
Investors bought 16% more gold during the first six months of this year than they did in the first half of 2009…when we were still in the midst of a global financial crisis.
Investors are buying any gold they can get their hands on…
MarketWatch reported last week:
Demand comes from a “broad spectrum of investors accessing gold via a range of products with gold-backed ETFs and bars and coins performing particularly strongly.”
As you probably know, gold ETFs like the SPDR Gold Trust ETF (GLD) track the price of gold. They trade like stocks, making them a convenient way to “own” gold.
However, it’s important to keep in mind that gold ETFs are “paper gold”—they’re no substitute for a gold coin you can hold in your hand.
That said, gold ETFs are incredibly popular. They can say a lot about investor sentiment toward gold.
Right now, investors can’t get enough of these funds. According to the World Gold Council, inflows into gold-backed ETFs hit 579.2 metric tons during the first half of the year. That, too, is a new all-time high.
• “Mom-and-pop” investors aren’t the only ones buying gold…
Legendary investors George Soros, Carl Icahn, Stan Druckenmiller, Bill Gross, and David Einhorn have all recently placed huge bets on gold.
These are some of the best investors to ever walk the Earth. None of these men got to where they’re at by investing like everyone else. They made billions of dollars by being contrarians. Yet, they’re all doing the same thing right now: buying gold.
Just as important, they’re buying gold for the same reasons we own gold. It’s the ultimate safe haven asset.
This tells us something is very wrong with the global economy or financial system.
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