A Couple Points of Interest.
We start a new year with even more concerns about higher inflation.
It is a problem that will accompany us for some time, inflation at the current rate is far from being temporary.
Investors will need to adjust their strategies in the future.
There are important issues that we should all pay attention to, we take a look at a couple of points of interest.
IMG must be clear, no matter what potential any market may offer, markets will move when they are right and ready, not when we want them to.
Real interest rates are and will remain fairly low or negative.
With higher inflation and negative real rates, historically it indicates a gold purchase.
The Fed’s stance to raise rates is already largely taken into account, and is no longer a surprise to investors.
The last time the Fed raised rates nine times, gold was up nearly 35%.
Between 2004 and 2005, the central bank raised rates 17 times and gold rose 70%.
There are other periods when rates increased and gold continued to rise.
For more information call IMG.
In the physical market, investors have been very active with no end in sight, silver coins were in short supply with high premiums due to demand.
Investors around the world are building physical holdings for fear of a major financial crisis of some kind looming.
Central banks were net buyers of gold last year. Several central banks that had not bought gold in over 10 years suddenly actively built their positions.
Net purchases by central banks are likely to continue or perhaps increase to protect the overall balance.
IMG holds the position that when investors from other market segments start to jump ship for various reasons, all that capital will be looking for a new home, and for many at that time the precious metals will be that home.
Much success to all.
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