Gold Riding a Good Three Month Wave

Cryptocurrency is riding the headlines while gold has been staging a minor comeback.

When American markets first traded in gold in 1970 an ounce sold for $36 dollars. Today its roughly $1,865.

Gold has a mind of its own, according to KTRH Money Man Pat Shinn of Heritage Asset Advisors, often thought of as hedge against uncertainty or against inflation, but historically you can find times of great uncertainty when gold tanked and high inflation when it sank, he reminds.

Exchange traded funds, Shinn explains, known in the trade as ETF’s, revolutionized how gold was traded, specifically ETF’s that hold nothing but gold, GLD the oldest among them. They are basically stocks that own gold. You can buy and sell gold on the stock exchange just like anything else, which spares investors from having to cart around the weight of a metal.

There are no fundamentals to gold, as opposed to stocks in corporate America. There are no earnings, no cash flow, and it doesn’t pay a dividend, so it’s hard to find comparison metrics.Instead, specialists follow technical analysis. Why gold rises to a particular level it is deemed a “buy” and when it falls below a certain level it is a “sell.” There are people who sit and watch those squiggly lines go up and down all day and trip options to buy and sell gold on the market.

Lately, people have been buying gold, raising its value over the past three months. According to Marketwatch, this is what the price of gold has looked like or the past five years. It had been on the rise before the pandemic began, but the instability of global lockdowns and supply chain interruptions made the precious medal a comfortable safe harbor to park investments throughout 2020. Gold’s appeal was reduced as vaccinations were introduced, but inflationary concerns have it ticking back up.

photo: Getty Images

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