2014 was a big year. It was the year where we saw long term trends slowly start to reverse. The US dollar strengthened. Oil crashed. Volatility rose. The Fed tightened…And Gold bottomed out.
Ever since gold peaked in 2012 gold miners have been getting the short end of a very long stick. US equities soared while gold miners fell into oblivion reaching lows not seen since the 2008 financial crisis. If you bought back then at record lows you would have made a killing. I think the same opportunity has now presented itself.
The global economy is very fragile and is hurtling towards another crisis as oil plummets and volatility and uncertainty rise. Gold like bonds will see appreciation as people seek safe assets. And only one of those is the true safe haven. I’ll let you guess which one.
As I’m writing this article, gold has rebounded to $1239 while oil is sitting at $45. So even if you don’t believe another global crisis is around the corner, just look at the numbers. Gold miners cost of business has fallen meanwhile the thing they sell, gold, has increased in value. I stated this fact a while back while oil was around $70 in October but it needs to be said again. Gold miners will be THE equities to hold for the coming few years.