Investor sentiment begins to shift in gold’s favor – ‘a trickle not a stampede’

LATE REPORT

Here is an interesting thought as we enter the weekend: Gold market sentiment seems to be shifting.

We commented on the shift earlier in the week and posted a chart from Sentiment Trader with a short analysis from Jason Goepfert, the site’s proprietor. At the moment, the shift is nearly imperceptible and, up until today, there was little, if any, comment about it in the media. Two articles surfaced today, though, that changed all that.

In one, International Investment cited a major pick-up in demand at a London gold retailer and quoted a another gold firm executive as saying that financial professionals had begun buying to hedge “global stock declines and a falling US dollar if the tensions between Russia and the US escalated on the back of an airstrike against Syria.” It also reports “a 36% increase in first-time investors purchasing physical gold amid general uncertainty over President Trump’s policies. . .”

In the second, a Bloomberg article, John Ciampaglia, the chief executive officer of Toronto-based Sprott Asset Management, says “family offices and pension funds, looking to protect their wealth are shifting back to bullion after exiting the asset class some five years ago.”

“Gold,” said Ciampaglia, “does play the role of a safe-haven asset historically and almost like an insurance policy. . . There are people going back to gold. It’s not stampede, but it’s a trickle.” [My emphasis]

As someone who has worked with retail gold investors the whole of his adult life, I can tell you the public migration to gold coins and bullion almost always begins quietly, but it can gain momentum quickly. It is difficult to know if we are entering one of those times now, but I can say that we are beginning to experience a trickle of our own at USAGOLD.

It is led, as has been the case in past sentiment shifts, by upscale investors with a simple but important intent – preserving their assets against the uncertainties they feel lie ahead. These investors also mention that the price seems to be right. Allow me to add an observation: Anytime financial professionals are committing their own (not clients’) money to gold ownership, it probably indicates something going-on of which the rest of us should take note.

Quote of the Day
“The concern that it might be a currency crisis that could eventually bring down the fiat money system is by no means an exaggeration. In view of the risks that come with an increasingly overstretched fiat money system, we consider gold as an effective insurance: The value of gold cannot be debased by central bank policies, and gold – in contrast to fiat money deposits and short-term debt – does not carry any default risk. Bought at current prices, gold is an insurance that has upward value potential.” – DeGussa Market Report


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