Gold recently exceeded its 15-month high of $1300. The last time gold broke surpassed that height was on September 29, 2010. According to financial analyst Dawn J. Bennett, there is enough momentum for the metal’s value to keep going up. On Monday, May 2, RBC Capital Markets reported the market’s upward trend could push it over $1400.
So, why is gold continuing to increase from its 15-month high? Dawn Bennett believes the answer is simple:
“Investors are seeing the truth behind our so-called recovery, which is that it’s just not a recovery,” says Bennett. “They are acknowledging the signs that we may be on the brink of an even greater collapse, despite the words coming from media pundits, government stuffed shirts, and the Federal Reserve. And in the face of deranged markets, the draw of gold is clear. Gold and silver have held many roles over history, but one significant one has always been as a hedge against turbulent markets.”
She continued, “These days, the role of gold as a currency, competing against the dollar, the euro, the yen, the yuan, is coming back into focus as well: there is a gold-backed cryptocurrency (think Bitcoin) called the Hayek, and the IMF is backing some loans with gold as security against fiat currency.”
Though the media reports the U.S. is outside of the meltdown in “global markets”, that is not the case. Dawn Bennett notes that central banks, including the Federal Reserve, have inflated asset bubbles through credit, housing, and equity manipulations. Billions of dollars have been borrowed by U.S. corporations at barely 1%, so they can buy back shares of their own stock. This is responsible for almost 50% of the stock market’s recent increases. Not to mention, the U.S. consumes more than it produces and is trillions and trillions of dollars in debt and unfunded liabilities.
Dawn J. Bennett believes gold and silver are in a unique position at this time. While they can be used as currency, wealth, and a hedge bet, they can also serve as insurance, says Bennett. This means insurance against loss of wealth, potential violent turbulence in collapsing markets, and fiscally foolish governments.
“And as with any kind of insurance, you can buy it and hope never to need it. Now is the time to do the research and search for opportunities and protective strategies,” Bennett explains. “If you do your homework and can be comfortable with the fact that gold and silver can be volatile, consider putting 5 to 10% of your portfolio in gold and silver coins, or other investments in this historic and lasting asset.