April 4, 2022
The idea that gold can’t be a good investment has pretty much gone out the window.
The last few months have proven that and the next few will confirm it.
Since the start of the year, the yellow metal has climbed in value while everything else has tumbled.
Now, just over a month into Russia’s invasion of Ukraine, the scramble to find any kind of monetary safe haven has investors turning their attention toward gold.
VTB, Russia's second-largest lender, has seen increased interest as more customers have been buying gold thanks to the effect sanctions have had on the country’s economy. Russia got rid of a value-added tax on gold buying from individuals on March 1. In the time since, VTB has said that it has received hundreds of orders, mostly for 1kg bars.
The filled orders have equaled about one ton of gold and the bank only expects that demand to increase with time.
And if you look at what’s going on in the rest of the world, you can see the trend is working in gold’s favor.
The overall price of gold has pulled back somewhat in recent weeks, but it’s still about 6% higher year to date while global equities are down 11% over the same period.
Gold-backed ETFs have seen large inflows so far this year. Here in the US, the Mint has seen strong sales of coins and bullion heading into Q2
So gold is getting attention everywhere, not just the niche investment pages.
The trend isn’t new, either. We’ve been seeing gold make a slow, steady climb upward for the past year or so. It’s only now, with war, inflation that can’t be ignored, and continued uncertainty that the story is finally gaining traction.
No one knows what’s going to happen between now and the end of the year. So far, the inflation we’ve been experiencing has proven to be persistent. Pair that with the fact that Russia seems poised to see its campaign through to the bloody end, and the fact that supply chain issues are still ongoing, and it seems like this turbulent market is sticking around longer than most people are willing to admit.
Central banks like the US Federal Reserve have promised to try and do something, but how effective that will be is anyone’s guess.
Long story short, in a lot of ways, it seems like things will get worse before they get better.
But what’s proving to be bad for most equities and currencies is also proving to be good for gold.
The environment we’re in now is something of a perfect storm for the yellow metal. Economic troubles caused by the pandemic segued into economic troubles caused by Russia’s invasion of Ukraine. On top of that, it all happened among continued supply chain constraints that further hamper the economy’s recovery.
It’s with no other choice that investors are putting their money into the one thing that seems to be thriving.
So gold and gold miners are enjoying a heyday. Their good fortunes are only going to improve as the price per ounce climbs and continues approaching all-time highs.
Being that it’s one of the seemingly very few ways to make money these days, you don’t want to miss out on the trend.
One company, in particular, is making money in the sector in a way you might not know about. The management behind it has positioned the company to be one of the biggest investment stories of the year, maybe even the decade.
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Editor, Daily Profit Cycle