You’re Crazy if You’re Not Buying This Asset

Precious metal prices have pulled back over the last few weeks as economic data improved.

At the same time, the outlook for interest rates has shifted to a “lower for longer” theme.

Both these factors pushed the dollar higher…

But that all said… the buck is still well off its 2018 peak and likely to resume its downtrend again soon.

The Bull Case Explained

I see the drawdown in metal prices as merely a pause in a longer upward trend. These pauses are healthy and can refresh gold and other precious metals for more gains down the road.

Especially after witnessing such a sharp rally at the end of last year and into early 2019.

Below, you can see gold ETF investors have been taking some profits off the table in recent weeks, with money flowing out of gold-tracking ETFs.

And why not after a gain of nearly 15% off last year’s low?

Still, these small outflows are dwarfed by the massive inflows to gold ETFs since October 2018.

In fact, the equivalent of 69 tonnes of gold were added to gold-backed ETFs in 2018.

That’s an additional $3.4 billion worth of gold buying by retail investors around the world last year.

Not surprisingly, the biggest demand came from the region of the world in the worst financial shape: Europe, where gold ETF assets grew 10% last year.

And retail investors aren’t the only source of demand for gold.

Central bankers, primarily in emerging markets, are big buyers too.

Central bank demand is widespread and has a shared theme.

Asian central banks have been big buyers, led by India increasing its gold reserves by 28.7%.

In Eastern Europe, Turkey boosted its gold holdings 153%, while Hungary and Poland were also big buyers, with gold reserves up 31.5% and 25%, respectively.

And Russia is really on a gold buying stampede, with its gold reserves soaring fivefold last year alone!

The thirst for gold by central banks is driven mainly by the desire to diversify assets AWAY from paper currency of all kinds.

They’re concerned about the health and stability of the global financial system, and with good reason.

The result?

A flight to safety and liquidity among central banks that desire the ultimate safe-haven asset making up the large share of their financial reserves.

We should take a cue from these powerful financial entities…

Now’s the perfect time to take full advantage of the recent pullback and add to your own personal gold reserves.

Here’s to growing your wealth,

Mike Burnick

Mike Burnick
Chief Income Expert, Mike Burnick’s Wealth Watch

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Mike Burnick

Mike Burnick is the editor of Mike Burnick’s Wealth Watch, Infinite Income, Amplified Income and Millionaire Moments. Mike has been bringing his trading strategies to the masses for over 30 years. He has been with Seven Figure Publishing since 2017. In 2018, the average return of Infinite Income beat the...

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