Gold stays steady within range, Dalio tells Davos the metal will be ‘top investment in years to come’

(USAGOLD – 1/22/2020) – Gold stayed steady within a narrow range overnight and early in the US trading session.  It is now down $1 on the day at $1556.  Silver is registering something of a pulse – up 11¢ at $17.86. Gold was on the minds of Davos attendees yesterday after Bridgewater Associates’ Ray Dalio advised investors flatly that “you have to have a certain amount of gold in your portfolio,” and that “the precious metal will be a top investment in the years to come.” Dalio is not the only billionaire investment manager endorsing gold.  In a letter to Greenlight Capital’s clientele, David Einhorn states succinctly why his fund owns the metal:

“U.S. total public debt to GDP is over 100%. With unemployment at record lows, the U.S. is running an almost $1 trillion annual deficit. The bipartisan consensus is that deficits don’t matter – it implies we can always print our way out of trouble. Meanwhile, although the Federal Reserve Bank’s balance sheet is very large and interest rates are already low, the Fed has cut interest rates and begun expanding its balance sheet again. All told, we can count on aggressive fiscal and monetary policies in both good times and bad. Gold continues to be a hedge in our portfolio against adverse outcomes related to those policies.”

Chart of the Day

Annotated line chart for silver showing Elliot Wave countChart courtesy of Hubert Moolman
Click to enlarge

Chart note:  “With the significant decline in the US Monetary Base since 2016,” says Elliot Wave analyst Hubert Moolman, “there are some serious threats facing the monetary system. These are setting up really favourable conditions for Silver prices and the position it has in the international monetary system. The expectation for much higher Silver prices are certainly reflected in the charts. I have previously presented this chart (now updated) to show how the current bottoming process (2015 to 2018) is similar to that of 2001 to 2003 . . .” He goes on to say that “this time we will likely see far greater price increases in a shorter period, especially given the serious threats facing the monetary system.” Though Moolman’s thesis is intriguing to say the least, we feel the necessity to caution once again that past performance is no guarantee of future results. His chart is reproduced with permission.

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