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Seeking Alpha: Why Gold Must Go Much Higher

March 10, 2022
Gold Price

Article by Clem Chambers in Seeking Alpha

I’ve been writing about gold for a long time, and it had recently got to the stage where I became amazed it had not gone on a strong rally.

That has of course changed with gold nearing ATH levels and being just a few cents shy of breaking into record high territory.

It is still incredible however that gold remains this cheap. Even without the Russia/Ukraine disaster it is hard to explain why gold is not a lot higher.

There is a huge sausage of inflation already in the pipe, and now yet more is being forced into the system. You might think that there are plenty of places to hedge against inflation beyond gold, but the last few months have exposed the reality that there are in fact few places to hide from the depredation of high inflation without risking a fat slug of capital to bearish markets.

Who wants bonds when interest rates are on the up from nothing?

Who wants to hide in equities when the indexes are hollowing out, leaving only a few hyper-expensive players to hold up the market?

Do you fancy crypto when it can, will and does make you either rich or poor on the turn of some outbreak of crazy teenage humour? It might be a trader’s paradise but crypto is certainly off the menu for ‘widows and orphans.’

Before you know it, the investor will have to stride off into the investment weeds to find anything likely to protect them from inflation that’s not already red hot. There is always property, but buying bricks and mortar is far away from the convenience most people want from their investments.

So, gold and its many investment proxies should be high on the agenda and in a screaming rally.

Yet it is not.

This is sobering on numerous levels. However, the major question is: can the market be right; that basically there’s nothing to worry about with either inflation or the awful conflict in the Ukraine?

This seems plainly wrong. Inflation is set to go on for a long time even without the Ukrainian situation. If you add the inflationary effect of the conflict, then it can only get worse and go on for longer.

Then add in the potential risks and costs of the Russian invasion of Ukraine dragging out or, even worse, escalating, and gold’s performance seems nothing short of pedestrian.

I still can’t believe my eyes. Unless something extremely fortunate occurs, gold must go much higher than the current levels.

Consequently, I suppose I’m left with two options: load up with even more precious metal or hug the theory that the market is always right.

It is not right, so I must buy more.....

To read this article in Seeking Alpha in its entirety and see the relating charts, click here.

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