Gold Breaks Through $1,300 for the First Time in 2017
Gold had a volatile trading range of $1,283-$1,301 intraday on Friday, which was the first time this year that gold has broke the psychological resistance of $1,300. There has been some pull back since, as gold is currently sitting at around $1285 as of print. In last week’s Gold Market Discussion, we pointed out that the VIX, which is the CBOE Volatility Index, soared up 44% in a single day. The VIX is at it again, having seen another 30% spike this past Thursday. Tragedy in Spain on Thursday has also added to recent geopolitical uncertainty as ISIS claims responsibility for the Barcelona terrorist attacks.
What this means for investors: Investors should learn from history- when volatility hits the markets, gold is the shelter from the storm. While stocks have performed to historic levels, we need to keep in mind that we are always only one major crisis or event from Wall Street imploding. When that happens, gold will be there in your hands- literally- to hedge and protect your portfolio. Gold has and will always be the ultimate “wealth insurance”.
[WATCH] Why Gold Could Soar Above $1,300
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What this means for investors: Buy low, hold high. The lower you purchase your gold, the more you are hedged against falling investments. If you brought gold at $1850 in 2009, you only protected a percentage of what was lost in the 2008 banking crisis and ensuing recession. However, if you purchased at $1,300 on the way up- you would have hedged more while stocks and real estate were crashing. If you look behind the Wall Street facade of 2017, the underlying numbers are outright scary. If you believe that there will be another massive crash in your lifetime, doesn’t it makes sense to buy at $1,300 instead of $1,850? The most stable place to be on a see-saw is right in the fulcrum. Diversifying with precious metals helps keep you there, but it is best to be there and prepared before the momentum shift begins.
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