Gold price hit another high this week – how can you invest? – The Week
Gold didn’t just have a good week, it’s having a good year.
Gold prices have moved up significantly since May 2014 and gained even more momentum since the beginning of 2016. Gold is the best performing major asset class this year.
A spate of positive articles in the mainstream media regarding the progress of both gold and silver contribute to a sense of building momentum. The regular negative, mainstream coverage that gold and silver receive is lessening.
Thursday, metals progress against the dollar slowed, at least in part because of the murder of Jo Cox in Britain.
John Rappoport, an alternative media blogger put the predictable coverage into perspective with a post entitled, “Jo Cox murdered: now comes the pysop.”
Rappoport’s believes that Cox’s death was exploited to slow the momentum of Brexit, which helped drive the dollar down against gold. He writes:
… A British MP, Jo Cox, who has urged Brits to remain, is murdered. The man who is arrested, Thomas Mair, is alleged to have shouted “Britain First!” (Brexit) as he killed Cox.
However, now witnesses on the scene are saying they heard no such thing. Too late. Social media and news media are running with the “Britain First, Brexit killer” narrative.
He points out that Mair himself stated he was on medication:
Specifically which drugs? SSRI antidepressants are a distinct possibility. If so, that’s a potential clue, because these drugs are known to push people over the edge into violent behavior, including suicide and homicide.
One of the Columbine high school shooters, Eric Harris was reportedly on drugs too, in his case Luvox. SSRI antidepressants tend to reduce normal emotions including empathy.
The lack of feeling may alleviate depression, but it can also make the user more violent over time.
It’s one reason why military veterans in the US have such a high suicide rate. Ironically, the drugs that alleviate depression make it easier to pull the trigger.
As tragic as Ms. Cox death was, the progress of precious metals surely does not depend on the Brexit vote, nor on the potential destabilization of the European Union as a result.
There are plenty of other uncertainties weighing down economic progress, including a general sense of unease about non-asset backed (paper) assets. Here, from the Week article (see excerpt above):
A retired engineer, known only as Ron, made the news this week for cashing in all his investments to buy £850,000 in gold bars. He’s lost faith in the stock markets … After all, gold is traditionally seen as a safe haven asset that historically performs well when the stock markets falter.
Ron is not alone in his perspective regarding gold versus stocks.
Billionaires like George Soros and Carl Icahn have recently begun investing in gold and gold mining stocks. This has received mainstream coverage as well.
Whatever one might think of these two, they certainly understand modern markets. Soros, who once made billions shorting the pound, is now shorting equities.
A Forbes report reinforces the current positives of precious metals.
Gold shone brightly for a few days this week before running out of steam, but if anyone thinks gold has done its best for 2016 they’re not looking at what’s driving the “barbarous relic” …
While the Forbes article cites a variety of uncertainties are driving the stock market including the Brexit vote and the American political situation, articles like one in the The Economic Times emphasizes interest rates.
The inverse relationship between dollar and gold is playing out in favor of the Gold bulls. Comments from the US federal Reserve have sent the dollar tumbling against major currencies and that has aided the rally …
Despite a determination to hike rates up to four times in 2016, the Fed has been unable to find space to do so. Employment numbers in the US simply don’t support the narrative of a recovery.
Look at the world’s larger economic picture and the lack of progress becomes increasingly clear.
In fact, it begins to resemble a global depression, with China, Europe, Japan and the US all struggling against massive consumer, corporate and sovereign debt.
Economies generally are caught in severe cyclical downturns; anxieties about economic progress have heightened.
In this environment both gold and silver may well continue to climb long term, helped by a lapse in the usual tide of negative mainstream media coverage regarding money metals.
Conclusion: When larger thematic elements of mainstream media coverage become less obvious or even falter, one can take that as a sign of a change in direction. Media coverage seems to be signaling this shift in sentiment. If it’s a trend, it will reinforce the progress of both gold and silver against the dollar.