Everyone's Favorite Precious Metal Is Headed to All-Time Highs By Brett Eversole
Investors are finally starting to notice gold again. The metal had fallen out of investors' good graces in recent years. Everyone expected gold to do well when inflation hit. But it failed at its "job" to hedge against inflation. So, folks moved on. Gold is rallying lately, though. It has kicked off the year with a double-digit rise. Even more, the metal has already come close to hitting a new all-time high. And as I'll share below, a record high is a near certainty from here. Let me explain... It's hard to slow a trend down once it gets going. Some investors don't want to believe it... But momentum works. And it's a powerful force in the world of finance. That's because rising assets tend to keep rising. A strong trend becomes a self-fulfilling prophecy, with more investors jumping in as prices rise. And right now, gold has this kind of upward momentum. A powerful rally has sent the metal soaring. It hit a new 52-week high last month. You can see it below... Gold bottomed last fall. Since then, it has staged an impressive rally. The metal's price broke past $2,000 an ounce. And it got extremely close to a new all-time high. According to history, though, the gains aren't over yet. Gold should continue to rally. And that means the metal will hit new highs sometime soon. To see it, I looked at each new 52-week high for gold since 1975. We've seen 23 of them before the most recent extreme. And those instances led to incredible outperformance. Take a look... Gold tends to go through major booms and busts. But over the long term, buying and holding the asset has led to solid returns. Its typical annual gain of 6% since the mid-1970s is only slightly less than the stock market's return. Still, investing in the metal at the right times can lead to much larger gains. And one of those times is shortly after a new 52-week high – like we saw last month... Similar setups have led to 2.6% gains in three months, 5.5% gains in six months, and 11.7% gains over the following year. Sure, those aren't "retire early" numbers. But they're still darn impressive. Plus, similar gains this time around will likely send gold blasting through its previous all-time high... even past $2,200 an ounce. And that's something few would expect, even after the recent rally. This isn't the time to give up on the metal. The trend is up... And that means you want to buy. Good investing, Brett Eversole Further Reading Gold is on a tear – but it still isn't loved. Despite the recent surge in prices, investors haven't piled into this asset yet, based on one key measure. And that means this rally has room to run... Learn more here. "Gold didn't live up to its name as an inflation hedge last year," Chris Igou writes. Folks gave up on the asset as a result. But one factor is much more important to the price of gold than inflation – and it's a tailwind that's in place today... Read more here. |
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