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Is it time to buy gold and what should we do with investments profit from the year

Commentaries & Views

Gold futures today gained $14.20 and is currently fixed at $1875.80. This is in response to a risk-off environment as US equities sold off today, diminish yields in US bonds and concern about the pandemic.

After sustaining approximately, a $100 drawdown on Monday, the last three trading days have maintained lows above a key level of technical support. Our technical studies indicate that there is strong support at $1845, which corresponds to the 23% Fibonacci retracement of the entire rally from the beginning of March to the new all-time record high achieved the first week of August at $2088.

While there are many mixed messages from different analysts in regard to whether or not gold will move higher or lower from this point there is one thing you should keep in mind. Central banks are now actively buying gold once again. It is been common knowledge that over the last decade the majority of the central banks were either neutral or sellers of gold. A report by Invesco revealed that central banks are expected to “maintain a firm grip on their gold reserves”.

In an article penned by Neils Christensen of Kitco News he said that. “The international investment firm conducted a central bank survey between August and September as gold prices pushed to an all-time high above $2,000 an ounce. According to the results survey, participants expect to see that central bank gold reserves will continue to increase during the next 12 months.”

The fact that central banks will increase their holdings in light of the pandemic reveals central bankers’ beliefs that paper currencies regardless of the nation of origin are expected to lose value, and gold is a excellent way to diversify their portfolio. There is an old adage that simply says, buy when the big boys buy, and sell when the big boy sell. If it is true that central banks are beginning to increase their holdings of gold bullion, realize these are the big boys.

Pandemic update

Be alarmed, be very alarmed. Globally the pandemic has reached a point that no one would have fathomed 3 to 6 months ago. Market participants globally have seen the pandemic continue to worsen as new cases beat previous daily records almost on a daily basis. However, the question we need to ask is what comes after the pandemic has run its course and we attempt to move to a new normal.

The facts remain that once the pandemic has concluded the economic fallout that will follow is going to be the most important economic decisions made by countries this century.

While I am sure as a reader you already know that today the United States reported that there were over 144,000 new cases of the coronavirus yesterday (Wednesday, November 11), and there were 1500 deaths. We have also been told by medical experts that the worst is yet to come. While there is hope in the knowledge that a vaccine will be forthcoming what can we do as individuals to economically protect ourselves and our families.

The fact that you are reading this article means that you are probably still gainfully employed or retired. Unfortunately, there are tens of millions of individuals worldwide that have no means of livelihood and are struggling to survive day by day even if their health is still intact. We are also well aware of the fact that no amount of government fiscal stimulus will solve the immense problems that result from the enormous expenditures that governments have allocated to aid those individuals that are either under employed or unemployed. Which is why I want to close this article with to requests. For those of you that are still financially solvent able to take care of your immediate family retire comfortably and do the things you worked your life to achieve, you have a choice as to how you can either do nothing or help those that have been affected.

The first request is a simple one, each day simply perform one act of random kindness to someone in need. The second request is that if you were able to benefit from your investments in the precious metals or US equities this year, allocate some percentage of your returns this year to charities that will have the primary purpose of helping those affected by the pandemic.

For those who would like more information, simply use this link.

Wishing you as always, good trading,

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.