We are active since a few months on Quora, the fast growing social questions & answers site. Essentially, we just summarize some thoughts of the articles we published on InvestingHaven especially on gold and commodities as well as the crypto and blockchain market. One of users addressed a very interesting questions to us, which we believe is a must-read for our followers: should we look to buy gold, silver, platinum or palladium in 2019? Interestingly, we published forecasts on all 4 precious metals: gold forecast (GOLD), silver forecast (SILVER), platinum forecast (PLATINUM) and palladium forecast (PALLADIUM). Let’s summarize what’s in those 4 articles in one short overview.
The underlying reason why the user asked this question is because he was thinking that precious metals act as some sort of hedge against monetary policies of central bankers. The never-ending depreciation of currencies is the big concern.
This is our answer published on Quora yesterday:
Yes, commodities like gold, silver, platinum may be denominated in a currency, mostly in dollar terms … so there is always this ‘fiat currency’ hedge investing thesis. But let’s face it during the 2008 crisis the only two assets that went up were the U.S. Dollar and Treasuries. So the precious metals thesis as a hedge against fiat currency does not always apply.
Moreover, we have seen on longer term timeframes the inverse relationship between the U.S. Dollar and gold/silver, but markets move in cycles and you have switch out of your gold/silver holding at a certain point in time.
Anyone disagreeing with this fell in love with his/her own thesis and has a narrow vision which eventually will hurt the value of his/her portfolio.
All that said, what we discovered with InvestingHaven’s research team is that there is always a bull market in one of the 4 precious metals.
Although there have been periods that multiple precious metals were rising simultaneously we also see periods in which just one precious metal was rising.
- The outlier has been palladium a couple of times in the past, primarily between 1996-2000 as well as in the last 3 years.
- Gold has a track record of leading silver from a bear market into a bull market. Silver tends to be a laggard, though has explosive power once it starts trending.
- Platinum is mostly correlated to gold, but we have seen a couple of instances in which it was rising as gold was weak or flat.
Right now, we see the following happening in each of the 4 precious metals.
- Palladium is struggling to stay in its bull market, likely its bull market ended or is consolidating. Regardless, we don’t see palladium continuing its strong rise in 2019.
- Platinum is trying to rise but has resistance. No bull market yet, but there is good attempts and some potential here. But, again, no bull market until proven by the chart.
- Gold (followed by silver) is picking up steam to attack its 6 year stubborn bear market wall ($1375). Only if it succeeds in breaking through $1375 will the gold + silver market become really bullish for the medium and long term. Note that our forecast for gold is $1550 by the end of this year, with our forecast of gold breaking through $1375 after summer of this year. This forecast was featured both on Barron’s and MarketWatch yesterday: Why gold’s a ‘bargain’ at less than $1,300 an ounce (MarketWatch) and How Gold Could Stage a 20% Rally This Year (Barron’s).
So this is the answer on the question in one sentence. Not one of the 4 precious metals is in a bull market at this point in time but there are several candidates, the below chart as well as the individual precious metal charts in the articles mentioned above show the exact price points to follow so each investor knows when a new bull market may start in gold/silver/platinum/palladium.
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