Monday, June 06, 2016

Rick Rule: Gold Will Replace Bonds
As The Safehaven Investment
"We are now past the bottom, particularly in precious metals. Yes, we have had the worst, but just remember, the future is not going to be straight up. There will be higher highs and higher lows but there will still be volatility which is a hallmark of this market. Printing money on a global basis is the fundamental reason for precious metals to rise in price. I have said for years that the most important determinant of the gold price, on a global basis, not just in the U.S., is the interplay between gold and the U.S. dollar, particularly the U.S. 10-year treasury. The U.S. treasury has been in a 35-year bull market; the yield having fallen from 15% to 1.8%. Could the yield fall a little more? Sure. But the truth is that the bull market in the 10-year treasury is closer to the end than the beginning. And so the bull market in gold is closer to the beginning than the end. You can’t charge a less than zero interest rate on gold; it doesn’t work that way. So the competition offered by sovereign bonds to gold – the other safehaven investment – is basically gone from a practical point of view for people who will hold gold or bonds."
LINK HERE to the transcript interview

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