Throughout history, gold has earned the reputation of being a safe haven. In the era of unabated money printing, fiat currency and rising inflation, gold is the only thing that seems real and tangible and a true store of value. So it's no wonder that the yellow metal witnessed a long bull run. However, the trend seems to be changing now. As the US dollar is appreciating, gold seems to be losing sheen. Further, with economies coming up with restriction on gold imports, not much seems to be going in favour of the gold. So does this signal the end of the gold era?
As per an article in Money News, the legendary guru Mr Jim Rogers believes that a further correction in the gold is likely. Mr Rogers had warned 2 years back of gold prices falling at the time when they were witnessing new heights. That said, he still sees gold as a reliable bet in the very long term. And we couldn't agree more with him on this for several reasons. For one, we still don't see any stable signs of recovery in the global economy. Unemployment rates still remain high, the companies are shying from investing and consumers are not spending either. While the Fed is hinting towards tapering off its QE program, it has not happened yet and we wonder if it will be able to exit smoothly as envisaged. In economies like Japan, monetary easing is still on the roll.
In short, the logic to buy and hold gold still remains intact. As stated earlier it acts as an insurance against reckless economic policies, inflation and money printing. Also, its universal appeal as an investment class cannot be denied. So far from losing faith in it, we believe that a correction in gold prices should be viewed as an opportunity to make it a part of one's portfolio.
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