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Precious Metals: The Best Hedge Against Reckless Central Bank Policy

Updated on August 8, 2016

We have been telling our Dohmen Capital followers since early this year that Gold and the Precious Metals sector should be one of the best performing sectors in 2016. Since the start of this year, the Gold ETF (GLD) has added in excess of 300 tons of gold to its vaults, increasing their assets-under-management by over 50%. That’s an incredible increase. So far this year, Gold is up about 25%, Silver is up over 40%, the Gold Miners ETF (GDX) is up over 110%, compared with the S&P 500 which is up less than 6%.

The reason why investors are flocking to Gold is because it is the best at being a currency, not necessarily because they are used as a metal in industrial processes. This year gold posted the largest inflows since June 2009. Investors have rushed to safety assets because they have become worried that the world’s central bankers are completely focused on debasing their currencies without any sort of reasonable limits.

Also the technicals for Gold have become very bullish and are forecasting that the move we’ve seen so far in 2016 is far from over. Recently Gold’s 50-day moving average crossed above the 200-day moving average, also known as the “Golden Cross.” This is a very bullish trend pattern which signals that momentum is rising. The last similar golden cross was back in February 2009, which was the start of a very strong bull market.

The world has begun waking up and investors are starting to realize that there’s no better “safe-haven” than owning hard assets, such as precious metals. Many prominent investors are now finally following our lead and see a similar trend in Gold, including Bill Gross, Stanley Druckenmiller, and George Soros among others.

Bond king Bill Gross recently mentioned his interest in Gold saying “I don’t like bonds; I don’t like most stocks; I don’t like private equity. Real assets such as land, gold…are favored asset categories.”

Legendary hedge fund manager Stanley Druckenmiller claims Gold is the asset class to own in these experimental times in which the "bull market in stocks is exhausted." He said " Some regard it (Gold) as a metal, we regard it as a currency and it remains our largest currency allocation."

George Soros spent $387 million between two gold positions in Q1 2016. In May, he disclosed he has a19 million-share stake in one Gold stock.

It is great to see high-profile investors finally realizing a strategy that our subscribers at Dohmen Capital Research and HedgeFolios have already been profiting from for many months. The world has begun waking up to the reckless central bank policy experiment. Investors will no longer simply follow the blind “buy-and-hold” or “TINA” strategies that have wrecked so many savings and retirement accounts of investors around the world.

Join the winning minority now and learn how you can protect your wealth and profit from the coming market turmoil. Click here to learn more about Dohmen Capital’s services for serious investors and traders.


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