The Last Shakeout for Gold

by | Feb 23, 2024 | Invest During Inflation | 2 comments

The Last Shakeout for Gold




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Gold has long been considered a safe haven for investors during times of economic uncertainty. However, in recent months, the precious metal has experienced a significant shakeout, with prices plunging to their lowest levels in years. Many are now wondering if this is the final shakeout for gold, or if there is still more downside to come.

The factors contributing to gold’s shakeout are numerous. One of the main drivers has been the strength of the US dollar, which has been climbing steadily in response to expectations of higher interest rates. A strong dollar makes gold more expensive for holders of other currencies, leading to a decrease in demand for the metal. Additionally, rising bond yields have made fixed-income investments more attractive than gold, further dampening its appeal.

Furthermore, the prospect of a global economic recovery and the rollout of COVID-19 vaccines have also contributed to gold’s decline. As investors become more optimistic about the future, they are less inclined to seek refuge in safe-haven assets like gold.

Another factor to consider is the increasing popularity of cryptocurrencies. Bitcoin and other digital currencies have been attracting a lot of attention, and some investors are viewing them as a more modern alternative to gold. This has further weighed on the demand for the precious metal.

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So, is this the final shakeout for gold? It’s difficult to say for certain, but there are several reasons to believe that the worst may be over for the metal. Firstly, the factors that have been driving gold’s decline may soon start to reverse. If the US dollar weakens and bond yields stabilize, gold could once again become an attractive investment option.

Moreover, the ongoing fiscal stimulus measures from governments around the world are expected to drive inflation higher in the long run. Historically, gold has been considered a hedge against inflation, and as such, it may regain its appeal as a store of value in the coming years.

Finally, the long-term fundamentals of gold remain strong. The metal has a limited supply, and its intrinsic value as a precious and rare resource is unlikely to diminish over time. As such, many long-term investors still view gold as an essential component of a diversified portfolio.

In conclusion, while gold has experienced a significant shakeout in recent months, there are reasons to be cautiously optimistic about its future. As economic conditions evolve and investment preferences change, the precious metal may once again become a valuable asset for investors. While the final shakeout for gold may not be over just yet, the long-term outlook for the metal remains positive.

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2 Comments

  1. @user-se2uv8cl4p

    GFI is getting hammered too. What a joke the mining stocks are.

  2. @user-se2uv8cl4p

    Yesterday WPM got whacked. Today, NEM is taking it on the chin. Lol. No, seriously, lol. What a total joke mining stocks are. I mean, this sector literally turns $10,000 into $1,000. Avoid the mining stocks at all costs. Stick to buying the actual metal and sleep soundly at night.

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