Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Four Reasons to Be Bullish on Gold in the Long-Term

  by    0   0

When looking at the gold market, it’s easy to get caught up in the daily price fluctuations or the most recent headlines on the financial channels and forget about long-term market dynamics. Gold, after all, is generally more of a long-term investment that has historically served as a hedge against economic turmoil and protected investors against fiat currency devaluation – otherwise known as inflation.

The World Gold Council recently released its Gold 2048 report providing in-depth analysis of how the gold market will potentially evolve over the next 30 years. In general, things look pretty bullish for the yellow metal if you consider a longer view.

The WGC has identified four long-term trends it thinks will impact the gold market in the coming years.

First, WGC analysts expect an expanding middle class in emerging markets to drive gold demand higher. This is especially true in India and China, the world’s top consumers of gold. China’s income growth is expected to come in at around 6.4% in 2018. And India’s economy is expected to be one of the fastest-growing in the world next year, expanding at an even faster rate than it did between 2012-2014. In fact, according to the 2018 World Economic League Table, India will leapfrog France and England in 2018 to become the world’s fifth largest economy in dollar terms. Consumers in both China and India buy a lot of gold, so this bodes well for the broader market for the yellow metal.

Second, the expanding using of gold in technology will further drive demand for the yellow metal. The WGC says, “Gold’s position as a material of choice is expected to continue and evolve over the coming decades.” The tech sector has an increasing appetite for gold.  Demand in the technology sector was particularly strong in the first quarter of this year, marking its sixth consecutive quarterly gain. Overall, demand for gold in technology and industry increased 4% to 82 tons year-on-year. Gold is used in electronics as well as healthcare applications.

Third, the WGC predicts mobile apps for gold investment, which allow individuals to buy, sell, invest and gift gold, will develop rapidly in India and China. Along with growing incomes, this will help increase demand for gold. Digital technology is also now allowing people to make everyday transactions in gold using a debit card. GoldMoney already provides these services and the market will likely grow.

Fourth, the WGC says the gold mining industry will have to grapple with the challenge of producing similar levels of gold over the next 30 years to match the volume it has historically delivered. We have reported extensively on the possibility we have reached “peak gold.” Peak gold is the point where the amount of gold mined out of the earth will begin to shrink every year, rather than increase, as it has done pretty consistently since the 1970s. Whether we’ve reached that point or not, it seems clear the world will face declining or stagnant production over the next several years.

The WGC views the economy through a pretty mainstream lens, but still finds plenty of reasons to be bullish on gold. The organization provides some analysis on the gold market the talking heads on CNBC and Fox Business may miss. It’s important to consider these long-term trends when evaluating the gold market. Don’t let the price fluctuations of the day scare you into making emotional investment decisions. SchiffGold precious metals specialists can help you navigate all of the information out there. Give us a call today at 1-888-GOLD-160.

WhyBuyGoldNowBanner.070815.590

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

More Air Hisses Out of the Housing Bubble

As interest rates rise, the air continues to hiss out of the housing bubble. Existing home sales tumbled to a two-year low in May. Sales fell to a seasonally adjusted 5.41 million units, according to the latest data from the National Association of Realtors. It was a 3.4% drop, bringing existing home sales to the […]

READ MORE →

Where Does the Gold Go?

A few years ago, CNBC commentator Jim Leventhal made a pretty astounding comment. When asked about gold, he said he had no interest in it because gold has no uses as a metal. This is a pretty absurd statement. Gold has multiple uses. And it would probably have even more if it wasn’t so rare […]

READ MORE →

Retail Sales Unexpectedly Dropped in May

Retail sales unexpectedly dropped in May, casting doubt on Federal Reserve Chairman Jerome Powell’s “the American consumer is healthy” narrative.

READ MORE →

Producer Prices Continue to Rise at Near-Record Pace

Producer prices continue to rise at a near-record pace, further undercutting the notion that we’ve reached “peak inflation.”

READ MORE →

Consumer Sentiment at Record Lows as Inflation Empties Wallets

Consumer sentiment plunged to record lows in June. The plummeting consumer sentiment numbers surprised mainstream analysts but they shouldn’t have given Americans are taking a pay cut month after month thanks to red-hot inflation.

READ MORE →

Comments are closed.

Call Now