Gold expert Jeff Clark, a major figure in the precious metals industry was interviewed at the Silver Gold Summit recently and discussed how he, like many analysts, believes that we are “on the cusp of a new Bull Market”. He sat down to discuss the reasons that he believes we are close to gold exploding in value and he also gave some advice on how to best approach in gold and how much you currently should be holding.
Clark began by discussing exactly where the market sits as we come to the end of 2019, look toward 2020. He noted that the current gold price charts look almost identical to the same charts in 2001-2003, which was a breakout period for gold. So, from a technical “chartist” perspective, gold looks poised to launch now as it did before the last major boom.
But technicals aren’t all that is in play. He and various other metals analysts across the globe are seeing fundamental catalysts that point to an upcoming surge in gold values.
There are a tremendous number of factors currently in play which all historically have driven the gold market up. Clark points out that when you look at things like the increase in negative interest rates around the world, geopolitical conflicts, and skyrocketing debt to GDP ratio which represents debt that (in all likelihood) can never be repaid, these all provide compelling reasons to buy gold right now.
And, while gold is currently in a very good position, having broken through the $1,400 ceiling and establishing that as a floor, all the signs indicate that gold still has a ways to go in terms of its price advancement.
Gold and Silver Stocks vs Physical Gold and Silver
When asked about what types of gold and silver stocks are best in the current climate, Clark answered the question but gave a major caveat first. He said that, because stocks are speculative, while he does own them, his number one priority is buying physical gold. Once you have that as your base “I would make sure I had meaningful exposure to physical metal, gold, and silver, before I bought stock.” He continued by saying that once he had a “safety net in place” of physical gold, he would stay away from producers and focus on developers, pre-producers, explorers and prospect generators.
Remember that a bet on gold and silver mining stocks are a bet on the individual mining companies that produce the metals. Physical gold and silver prices may rise, but if a company fails to remain competitive, that company’s share values can sink relative to the price of the metals. True exposure to precious metals is based on the “commodities” themselves, not necessarily the businesses who produce or sell them.
How Much Gold Should You Hold?
Clark finished up by answering the biggest question on everyone’s mind, exactly how much gold should you be holding given the current market conditions. Clark was asked if he would continue to recommend the normal 5%-10% investment in gold or numbers closer to what some are now suggesting, in the 20%-30% range? He responded by explaining, “Because risks are so elevated in many segments of our society with our currency, geopolitical, economic – there are so many risks out there – because of that, in my opinion, this is a time to be overweight [in] precious metals.”
The term “overweight” is relative to your risk tolerance, financial objectives, and capital resources. Every precious metals investor is different when it comes to these three factors. So, of course, you will want to buy prudently. But if you want to get in on the edge of the coming bull run in gold and silver, you should certainly consider buying soon.