Gold: A Cyber Monday Bargain!

Since peaking at $2,067 in August, gold is down by $250.

Does that mean its bull market is over or is gold a Cyber Monday Deal?

In this correction, gold has already given back 15%, leading some to conclude that the gold bull market it finished.

After all, there are already three promising vaccines near approval. They will be rolled out over the next few weeks and months, and life will start getting back to normal. 

Or will it?

We’re still in a major second wave. 

Many places are setting record numbers of daily Covid-19 cases.  Lockdowns are ramping up. 

And the effects of Thanksgiving reunions, followed by Christmas gatherings, are likely to boost restrictions further as cases soar even higher.

Businesses will feel even more strains, and unemployment could go through its own second wave.

Here’s why gold’s bull is still in its infancy…

Four Gold Forces

Although the news of several effective vaccines is highly encouraging, it will take some time to produce, distribute, and administer to billions of people.

We are at best months, but more likely a year before some semblance of normalcy in our daily lives. The effects of this pandemic will be far-reaching on society and business for a long time.

That’s why, in my view, there are at least four major forces that will support gold in both the near and medium/long terms that investors need to understand.

Gold force #1. The pandemic’s damage is not over, and that will lead to more stimulus. If you think we’ve seen the end of money-printing, think again.  Airlines, tourism, restaurants, commercial landlords, and small retailers, to name a few, are struggling. Many have borrowed heavily, and many others have already gone bankrupt. They will continue to face challenges for many more months. And calls for help will endure.

Gold force #2. The U.S. dollar continues to weaken. After peaking at 103 in March, the U.S. Dollar Index has been falling steadily. At 92, the index is back to levels last seen over two and a half years ago. There’s little doubt that massive money printing, and the prospects of plenty more from Biden, could continue to pressure the dollar, helping to support gold in the process.

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