With mounting risks in the world economy, an aging bull market that could now could be considered a generation old, and interest rates around the world going negative, precious metals have been the place to be. I am fully expecting the gold and silver rally that began in May this year to continue for many months to come.
Gold and silver have both outperformed most other asset classes, each up about 16% year-to-date. Stock shares in gold mining companies have collectively performed even better!
Demand for gold and silver has increased dramatically. So far, central banks have been the primary precious metal buyers, along with many very wealthy individuals such as Patrick Byrne, CEO of Overstock.com, who recently sold shares in his own company to purchase gold instead. https://markets.businessinsider.com/currencies/news/overstock-former-ceo-patrick-byrne-sells-stake-buys-gold-crypto-2019-9-1028538499
Central banks, particularly those in China and Russia, have been stockpiling gold at a rate not seen since the financial crisis recovery in 2010 in order to shore up their falling currencies. https://www.barrons.com/articles/china-and-russia-buy-gold-in-case-a-currency-war-breaks-out-51568367004 As yet, the average individual investor has not yet noticed the movement of wealth from paper assets (stocks and bonds) to real assets like gold and silver. That tells me this rally has a LONG way to go, as individual investors are usually the last ones to jump on the trend.
Currencies around the world, including the dollar, are falling in real terms at an increasing rate. There have been so many dollars and euros printed, the public now treats them like an ocean of seawater. When currency is this plentiful, its value drops. With negative interest rates, where a lender PAYS you to borrow money, as has happened in much of Europe, one could argue that the cost/price of money is effectively zero. And we all know that something with a cost of zero, also has a value of zero! By rescuing the failing banks from the 2008 financial crisis, the central banks have now successfully destroyed our currency!
Given that paper assets like currency are becoming worthless, I am converting wealth I own into REAL assets like gold and silver. It is quite plausible that this trend to REAL assets will become a stampede in due time, and if I wait until the panic happens, it will be too late!