Gold Bull Market Will Continue

Gold's value as a safe haven store of wealth is critical in times of financial uncertainty. This uncertainty is reflected in the current real rates. Regardless of another Fed rate hike, we at Strategic Gold still view the current real rate environment as very supportive of higher gold prices.

Gold is the one financial asset that carries with it no counterparty risk. The value of your gold does not rely on any other party's ability to pay. This is key, as the financial system is burdened with massive, excessive debt loads that we have never before witnessed. Gold is the antithesis of debt.

The dollar itself is also coming under severe pressures. After a multi-decade run as the global reserve currency there are signs that may be changing. Currently, the great majority of global trade, as well as global debt, are transacted in dollars. But the privileged status the dollar enjoys in world trade is being challenged. Bilateral trade agreements between China and its trading partners have begun the process of dethroning King Dollar.

Other nations including Russia, Turkey, Iran and India have followed this bilateral trade path. The process is long but the trend is clear: the days of King Dollar are numbered. This will weaken the dollar over time, something the current administration desires. A weak dollar is reflected in a stronger gold price. This trend is not changing.

Gold also performs very well in times of geopolitical uncertainty, which is clearly the case now and for the foreseeable future. Conflict and tensions always exist in the world but lately those tensions have become more profound.

Source: The street
Trader I. Ivanov

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