$18T Reasons to Give Gold for the Holidays
The comments below are an edited and abridged synopsis of an article by Sprott
2020, gold is up 23.44%; silver is up 43.07%; palladium is up 20.04%; and gold mining equities are up 22.20%. By comparison, the S&P 500 TR Index5 is up 16.28% YTD.
Beyond this strong precious metals performance, there are several macro-economic reasons why gold and other precious metals would have made a perfect gift for the holidays: Real interest rates are at a 5-year low; a growing pile of IOUs are financing the US debt; there is nearly $18 trillion—and counting—of negative-yielding debt in the world today; gold will build on its momentum in 2021; and gold provides an alternative to bonds.
If you don’t hold some gold, silver and other real assets, you should. The old argument of gold not paying a yield is now moot. Tens of trillions’ worth of bonds across the world have negative yields in real and nominal terms. Bonds cannot function as a portfolio risk mitigator the way they’ve done traditionally, and we need to re-examine the traditional 60/40 portfolio configuration.
“Finally,” writes the author, “I would be remiss if I did not remind you about the remarkable opportunity we see in gold mining equities. Gold miners have never been this profitable in decades. Many pay a healthy dividend yield while allowing you to partake in any upside to the gold price.”