This is pushing real (inflation adjusted) interest rates down again … which is precisely when gold shines!
Forget the Consumer Price Index. We all know this flawed gauge of inflation is way behind the curve in measuring the true cost of living and it’s a backwards-looking indicator. Instead, focus on leading indicators of future inflation pressure: Higher commodity prices, rising wages, higher rental rates and soaring health-care and education costs … these are all pointing to higher inflation down the road.
Meanwhile, global central bankers are committed to ultra-easy money policies as far as the eye can see. The stage is set: Falling real interest rates, plus rising cost pressures in a pure oxygen environment of ultra-easy money will surely light a fire under gold prices again and probably sooner rather than later.
One of the easiest ways to invest in gold is the iShares Gold Trust (NYSEARCA:GLD) or to place a more leveraged bet on the upside for gold prices, consider the Market Vectors Gold Miners ETF (NYSEARCA:GDX). For my money, in this climate it makes sense to have at least some of your speculative capital invested in this out-of-favor asset class that finally looks set to surge higher again.
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