Jeffrey Nichols, Senior Economic Advisor to Rosland Capital had the following comments:
I am frequently asked about the economic outlook and investment-market prospects. Most of all, people ask, “Is now a good time to OWN gold?”
My answer is always the same: NOW is always a good time to own gold.
Importantly, we OWN the metal because, over time, its inclusion in a typical savings and investment portfolio provides a variety of benefits – diversification, reduced portfolio volatility and risk, inflation protection, as well as insurance against unknown and unpredictable economic and political risks, the so-called “black swan” events.
We don’t know the future, and that is precisely why gold is an important investment and savings asset. It provides a form of “wealth insurance” that is accessible to nearly everyone, from the humblest household to the richest nation.
Investors and savers should definitely own some for safety and capital preservation – so should central banks.
NOW is also a good time to BUY gold to benefit from the unprecedented price appreciation that lies ahead.
I’m no “gold bug” – that is someone who believes gold is the only true money . . . and, if only the major world governments would reintroduce some sort of “gold standard”, all would be right with the planet Earth.
Nevertheless, I’m super-bullish on gold’s long-term prospects . . . and I do believe NOW is an excellent time to invest in gold in order to capture the unprecedented appreciation that lies ahead.
Investors owning gold do not have to expect – or hope for – some economic or political catastrophe to benefit from gold ownership.
Over the long run, gold should do well as an investment asset even in the best of times, thanks to rising household incomes and expanding middle classes in China and India.
These are – by far – the two biggest gold-consuming nations, and as long as there is long-term economic growth in these countries, there will be long-term growth in their appetite for this precious metal.
In addition, gold should benefit from continued net demand from the official sector as a number of central banks underweighted in gold strive to reduce their dependence on the U.S. dollar as the world’s dominant reserve asset and trade-settlement currency.
Indeed, whichever way gold prices move next – up, down, or just sideways – I expect super-sized gains over the next three to five years with prices more than doubling their all-time historic high.