Last week, I made a bullish case for some precious metals that play a dual role, particularly platinum and palladium.
They’re in demand both for industrial use and as a store of wealth.
So, this week, I wanted to review my short- and long-term outlook for a true precious metal – gold.
My latest analysis — backed up by my cycle and historical research — tells me that my $5K gold target could be a bit conservative.
Long-term, the yellow metal could ultimately go much higher in price.
But, in the short-term, the cycles show gold heading a little lower, before finally heading higher again.
So, let’s take a look at the current cycle-forecast chart on gold …
In the chart above, you can clearly see the cycles accurately called for a temporary peak before heading lower into mid-July. So far, it’s right on track.
But, I don’t let the short-term moves impact my long-term view on gold. Neither should you.
In fact, I look at these moves as an opportunity to add to my gold positions.
Why? Because there are still plenty of bullish factors for gold – geopolitical risks and physical demand.
First, there’s an abundance of geopolitical risks facing the global economy, including:
- Terrorist attacks – Which have been on the rise, especially among European nations.
- North Korea – Tensions between the U.S. and North Korea are as high as ever.
- Russia – Investigations into Russia’s meddling with the 2016 U.S. elections are still ongoing.
- The Middle East – Where the situation is far from under control. And any flare-ups there are worthy of driving more safe-haven demand for gold.
Second, physical demand for gold is rising.
China and India, the world’s two largest consumers of the yellow metal, have seen an uptick in their demand for the yellow metal, after a weaker first quarter.
Additionally, gold is gaining appeal as an attractive alternative investment right now.
That’s because the U.S. stock market is looking toppy on a technical basis and valuations are stretched at current levels. Both of which point to an equity market correction – which will only drive more safe-haven demand toward gold.
The above factors are worthy of propelling gold higher later this year. And that’s why I’m not worried about any short-term weakness in gold – my longer-term outlook is bullish.
In fact, the current weakness in gold presents a good opportunity to accumulate and build a larger position at more attractive levels.
I recommend that you seize this upcoming opportunity to add to your gold positions or to start a new position if you are not already investing in gold.
Plus, gaining exposure to gold in your portfolio is now easier than ever.
You can use ETFs – like purchasing shares of SPDR Gold Shares (GLD) – when gold prices finally bottom out later in the summer.