Gold’s moment in the sun is nearly here.
While uncertainty continues causing spikes and drops in the broader market, gold is continuing its climb higher.
While mass sell-offs followed by short-lived valleys continue to give investors in the NASDAQ and S&P 500 mild panic attacks, gold investors have been able to breathe much more easily with the yellow metal’s more stable changes in price.
Any recent upswings in the broader market have largely been due to tech stocks. Here, it’s the usual suspects like Apple, Facebook, and Google that are dragging everyone else along for the ride up.
But even in that sector, we’ve seen that not everything is clear skies and smooth sailing.
Tesla lost something like a fifth of its value earlier this week. Though it’s slowly clawing its way back, it’s still viewed as being on shaky ground and is no longer the market darling it was.
That’s just one stock, of course, but it goes without saying that it could happen to any company in this market where barely anything makes sense anymore.
And it’s in that murky future that gold is only growing stronger.
The Word is Getting Out
As uncertainty gets worse, more people are turning to gold as an investment.
It’s something we’ve continued harping on in these pages all year, but it’s become more apparent in the eyes of the general public in just the last few months. It started with Warren Buffett making a sizable gold investment just a few weeks ago. The subsequent attention from the mainstream media, of course, brought more attention to the metal as a haven. Remember, Buffett is someone who has largely been against gold investment for much of his career.
It seems like that fact isn’t lost on other institutions, as hedge funds are starting to pile into gold investments as well. Long positions on gold futures and options are increasing and short positions are being reduced at the same time. This is all according to recent data from the Commitment of Traders report, a weekly publication that shows the aggregate holdings of different participants in the U.S. futures market.
It’s not headline news like Warren Buffett buying in is, but it’s showing the gold’s steady climb isn’t going unnoticed. Billionaires are already in. Institutions are starting to follow suit. It happened just last week with the Ohio Police & Fire pension fund diversifying its portfolio with gold.
It’s not going to stop there. By the time retail investors start piling in, gold’s steady climb will hit a pace that most of them won’t be able to keep up with.
Beating the Crowd
Look at it like a hip new restaurant that gets ruined by crowds once it gets popular. Think about the story where a stock gets so hot that even the cab driver/barber/shoeshine boy is talking about it. The same thing will eventually happen with gold. Once word gets out that a commodity is the safe place to put your money, everyone will be scrambling for that lifeboat.
Warren Buffett saw the change, then the hedge funds and institutions began to follow him. For now, the mainstream media continues to downplay gold in favor of the few tech stocks that are dragging everyone else to artificial highs.
But give it enough time and they’ll be championing gold’s rise to the top, too.
You don’t want to find out that gold is the way to go from a talking head on CNN.
Not when you can get in on a gold play that’s still in its early stages.
Those early stages will pass by faster than you think. By the time things really get going, it may be too late to get in.
