Should you invest in gold (and silver) now?

Yes! Here’s why…

Gold prices have been on a tear, setting new high after new high.

There are several reasons for this, and a little history lesson is in order here.

Here are six reasons people invest in gold (and silver to some extent).

1. Store of Value: Gold has been seen as a reliable store of value for centuries. It tends to hold its worth over time, making it a hedge against inflation and economic uncertainty.
2. Safe Haven: During times of economic instability or geopolitical tension, investors often flock to gold as a safe haven asset, as it is perceived to be less volatile than other investments like stocks or currencies.
3. Diversification: Gold is often used to diversify investment portfolios. Its price movements are typically not strongly correlated with those of stocks or bonds, so holding gold can reduce overall portfolio risk.
4. Inflation Hedge: Gold is often viewed as a hedge against inflation. When the value of currency decreases due to inflation, the price of gold often rises, preserving purchasing power.
5. Global Demand: Gold has universal value and demand. It’s used not only for investment purposes but also for jewelry, technology, and central bank reserves, which supports its market liquidity.
6. Historical Significance: Throughout history, gold has been considered valuable and has maintained its allure. This historical significance adds to its appeal as an investment.

Overall, people invest in gold for its perceived stability, diversification benefits, and historical track record as a store of wealth.

Right now, all those factors above are ticking a strong YES for investing in gold.

But there’s more to the story….

Gold prices are surging on hopes that interest rates will fall, and the US Dollar will weaken.

Gold is priced in the US Dollar and a weaker dollar means a higher price for gold as more dollars are needed to buy an ounce of gold.

But interest rates are not falling…and that is where one of the opportunities to gold exists for a short window.

As J Powell noted last week in the Federal Reserve Open Market Committee meeting, interest rate hikes are off the table and the next move would be lower. When that happens, gold should move to new highs and you need to be positioned for that move for both the long-term reasons as mentioned above, and for a shorter-term pop.

YOUR ACTION PLAN

But don’t buy gold, the metal. The better plays are companies that are mining gold and silver as they are trading at very attractive valuations compared to their historical levels when compared to the price of actual gold and silver.

In Catalyst Cashouts, we are positioned for this move, and you still have time to jump in with us before our livestream tomorrow at 2 p.m. EST.

Find out exactly how we’re trading metals by clicking here.

MONDAY MARKET MINUTE

• Berkshire Rolling in Dough: As of right now, Berkshire is sitting on a record cash pile of $189 billion – and despite that – Warren Buffett still cannot find any investments that he finds attractive enough to deploy that cash. To me, that’s a little concerning. It’s not a great signal for the stock market when everything appears overvalued. Tracking.
• Generac on our Radar: The 2024 Atlantic Hurricane season threatens to be one of the strongest in years, according to Colorado State University’s annual Atlantic hurricane season forecast. With that, power systems provider Generac is starting its biggest sales period for the year.
  To see exactly how we’re playing GNRC, click here to unlock our Catalsy Cash-Outs Live portfolio.
• The “higher for longer” trade: If rates stay higher for longer than most expect, then this could frustrate borrowers – but the largest banks like JPMorgan (JPM) and Citigroup (C) could benefit. They’ve already seen net interest income surge by double digits since the Fed began its’ inflation-fighting moves – and the longer this continues, the better for the mega-banks.
• Time for Homebuilders Too? After a rough April, which saw the S&P Homebuilders XHB drop -8% (which was double the loss of the S&P’s -4% drop), it could be time for a bounce. Mortgage rates appear close to peaking – which could trigger a bounce for homebuilders. Historically, this sector group rises in multi-month periods when mortgage rates dip – so this could be one to trade headed into the summer.
• TJX gets a boost : Discount retailer TJX was upgraded last week to buy with a $132 price target at UBS – citing that the off-price retailer now stands to capture more market share from department stores. Plus, their two newer businesses, HomeSense and Sierra Trading Post, both look promising.