Three Reasons To Invest In Gold
In recent months, precious metals including gold have surged ahead as growing global economic and geopolitical uncertainty trigger a flight to safety among investors. The lustrous yellow metal is up by 23% over the last year, trading at its highest point since mid-March 2014. Despite claims among some analysts that gold is poised to pull back, there are signs that indicate it has further to run.
Now what?
Firstly, the growing consensus among analysts is that gold has entered a new bull market after being trapped in a bear market over the last years.
In mid-May of this year JP Morgan was advising its clients to position themselves for a new and very long bull market in gold. The reasoning behind this was that in an economic environment where negative interest rates dominate and bond yields are at historical lows, gold is an attractive hedge and risk-off investment. This sentiment appears to stretch across the major banks; Bank of America subsidiary Merrill Lynch expressed a similar view.
Meanwhile, investment guru George Soros, who once famously broke the Bank of England, has been loading up on gold and gold miners, and Barrick Gold Corp. (TSX:ABX)(NYSE:ABX) is among his largest holdings.
Secondly, growing economic and geopolitical insecurity makes gold an invaluable hedge against uncertainty and market volatility.
Gold is perceived to be a store of value and a safe-haven asset in times of turmoil. With the global economy filled with fissures and entering an era of uncertainty both economically and politically, investors are growing increasingly wary and are hedging their bets against another financial crisis.
In the wake of Britain’s Brexit vote comes a call for big government spending, no less than from the think tank representing the nation’s 130,000 number crunchers: the Institute of Chartered Accountants in England and Wales. After noting the decline in infrastructure spending (from 3.4% of GDP in 2009 to 1.9% now), the group calls for massive renewed expenditures on schools, hospitals, housing and energy pipelines.
The reason given for the escalation of governmental efforts to restrict or, indeed, outlaw cash transactions is the same in all of the above-mentioned cases: cash is the ”instrument of choice” for terrorists, drug lords, money launderers and tax evaders; law-abiding citizens have no real use for it anymore. With the rise of credit and debit cards for everyday payments, online banking and wire transfers for large sums, all being embraced as modern alternatives to cash, the average citizen is now actively being encouraged to abandon physical currencies and digitalize all their transactions, for the sake of transparency. In other words, the official narrative, reading between the lines, roughly translates to “you have nothing to fear, if you have nothing to hide”.
Now a team from the HZB Institute for Soft Matter and Functional Materials headed by Prof. Matthias Ballauff has directly observed for the first time a lithium-silicon half-cell during its charging and discharge cycles. "We were able to precisely track where the lithium ions adsorb in the silicon electrode using neutron reflectometry methods, and also how fast they were moving", comments Dr. Beatrix-Kamelia Seidlhofer, who carried out the experiments using the neutron source located at the Institute Laue-Langevin.
Diversify Or Die? Big Oil’s Dwindling Options For Survival
China Oil French Total has emerged as perhaps the smartest member of the Big Oil club, wasting no time waiting for oil prices to return to early 2014 levels, instead, venturing into the brave new world of renewables and power storage systems . This move by the French giant was recently lauded by Lux Research in a paper titled Superpower Darwinism: What Big Oil Can and Cannot Do About Total’s Billion-Dollar Battery Move. Total is preparing for a world that will be dominated by renewable energy, and betting on it to ensure its long-term success. Meanwhile, other supermajors are finding it hard to acknowledge climate change—the single most important factor that is spurring the renewables boom. Until relatively recently, this acknowledgement could go unnoticed. Renewable energy was more hype than anything else: it couldn’t be stored for any practical length of time, it was – and still is – […]
