4 Reasons Why "Gold Has Entered A New Bull Market" - Schroders

GoldCore's picture

- 4 reasons why "gold has entered a new bull market" - Schroders
- Market complacency is key to gold bull market say Schroders
- Investors are currently pricing in the most benign risk environment in history as seen in the VIX
- History shows gold has the potential to perform very well in periods of stock market weakness (see chart)
- You should buy insurance when insurers don’t believe that the “risk event” will happen
- Very high Chinese gold demand, negative global interest rates and a weak dollar should push gold higher

This week gold broke through the key resistance of $1,300. For some time market commentators have been signalling this level as the point of entry for a new bull market.

Often price can be distracting when it comes to trying to figure out what is going on. Two Schroders fund managers called the new bull market in gold about a week before the price broke through the key level.

Gold has entered into a new bull market. As we have discussed previously, there are four main reasons for our stance:

  1. Global interest rates need to stay negative
  2. Broad equity valuations are extremely high and complacency stalks financial markets
  3. The dollar might be entering a bear market
  4. Chinese demand for gold has the potential to surge (indeed, investment demand in China for bar and coin already increased over 30% in the first quarter of 2017, according to the World Gold Council)

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Silver Savior's picture

Gold is pretty and shiny. All the time growing up I always wanted gold and lots of it. It always was one of those things I really wanted but could never have. Well until now.

CaperAsh's picture

I'm a fan of junk silver. If paper gets dysfunctional, then you can buy stuff with those old dollars, quarters, dimes. What can you do with an ounce of gold? Trade it in for 1000 loaves of bread which you then have to sell for what.....

junk silver coins!!

Silver Savior's picture

I am big on all types of silver but when I do buy gold I get no more than a tenth ounce coin. Gold will only be used for the biggest of transactions unless we see silver being worth more than gold on it's fundamentals. 

Tenth ounce gold and one gram bars are much easier to deal with than a full ounce.

Dragon HAwk's picture

Go to a coin auction sometime.. All Eyes are on the Gold Coins.

Silver Savior's picture

I think it's because people have been told that gold is the main precious metal but I can see silver giving gold a run for it's money. I think more should be spent accumulating silver than gold.

Gods's picture

Crypto and Gold.

Anarchyteez's picture

For sure! The trend is your friend!!!

ET's picture

I am going to write down for you a bunch of letters and numbers on this piece of paper and, in return, I want all of your Gold Coins.

Crypto is fool's gold. Unless you have the Gold, you own nothing. Literally.

A bird in the hand is worth two in the bush. Always remember that.

Silver Savior's picture

I used to think that too but it's hard to make money these days. I have a nice silver stack so I thought why not get into crypto it's a lot like stocks in steroids. If I get profits it will eventually go to aquiring a big gold stake.

The Next Millennium is Now's picture

I doubled my money in crypto's in 6 weeks without really trying. My son is doing far better then me and is ready to quit his day job. Haters hate things they don't understand, that's ok with me. I'm not betting my life savings on crypto's, just enough to have some fun!

Anarchyteez's picture

Gold stocks are sideway today. They didn't get the memo.

Fun wont happen until 1,400 if it's ever allowed.

2banana's picture

5.  Massive debt that will never be repaid.  Both public and private.

Dame Ednas Possum's picture

6. Because it's gold... stupid. 

 

LawsofPhysics's picture

Paper or physical?  I call bullshit. The human population is simply much too large and ignorant (on average) to accept or understand gold as a monetary instrument. Sorry but you are wrong.

aqualech's picture

Have you ever heard of India or China?  Are those groups of people uninterested in gold ownership?

Silver Savior's picture

Yeah they understand gold and they are even more nutty than us. 

Latina Lover's picture

Disagree.  Outside of the USSA and the 5 eyes, most of the world experiences regular currency devaluations.  Until the cryptos become more pervasive,  hard assets such as Gold are one of the best ways to preserve wealth.