Physical Gold Investors Will Eventually Be Rewarded for Their Patience
The comments below are an edited and abridged synopsis of an article by Anna Sokolidou
Many gold investors are worried right now. Indeed, at the end of February/beginning of March, gold exceeded $2,000 per ounce, while now in May, the price is slightly above $1,850. Most of the sell-off was due to the hawkish Fed and record-breaking inflation. The latter was not only due to easy monetary policies imposed in 2020, but also poor logistics. The supply chains were broken because of Covid and the imposition of sanctions against Russia in March.
Geopolitical uncertainty has not gone away, the supply chains will take a long time to rebuild, and the Fed cannot do much about currency devaluation. Gold is highly undervalued, and it is uncertain when it will break its record high.
Up for discussion: Gold’s undervaluation; macroeconomic indicators and the Fed; geopolitics; why is gold so undervalued; and the outlook for gold:
“All that obviously means gold is undervalued. That is why, in my opinion, many assets may crash in gold terms. But I fully admit I cannot predict when and by how much the gold price will shoot. However, when the market realizes this, it will most probably be too late. Gold is a perfect hedge against fiat currency devaluation and is a good asset to hold when many other asset classes are over-popular in spite of the stock market correction this spring. I suggest buying physical gold for the long term. “