When it comes to investing, gold and silver are often overlooked. They don’t run up aggressively like stocks and bonds do. But, the precious metals tend to be a storehouse and solid rock of preservation for the very long term. From 2012 to 2015, the metals couldn’t get any traction as the stock bull market exploded and was the place to be as uncertainty was nearly non existent. Now, with a changing of the guard across the globe investors and individuals are seeking the right place to park their savings during times of uncertainty.
The uncertainty in 2017 is mostly coming out of Europe, along with the recent election and policy of President Trump. In Europe, countries are turning against the European Union and the euro. Populism is taking hold as countries are drowning in debt with the pressures of poor European Central Bank policy weighing them down. In France, the nationalist movement under Marine Le Pen has brought about the idea of reinstating the franc. In doing so, they would pay off their outrageous ECB debt with freshly printed francs. With over one trillion in debt liabilities, this move threatens the stability of the European financial system. If executed, defaulting on ECB debt will more than likely lead to a domino effect across all of Europe. All countries in the EU would then follow suit and all sovereign currencies would devalue against eachother.
Fears of widespread instability in Europe has gold and silver set up for a much higher run in 2017, along with inflation and policy fears in the United States. In her testimony on Tuesday and Wednesday, Janet Yellen said that growth in the United States was quite disappointing. Growth has been disappointing for the past 8 years, and for the first time the Federal Reserve finally told the truth under who other than newly elected President Trump. China has been contributing to the upward move in the metals and bitcoin, too. As their currency devalues the people rush towards safe haven assets. According to most major analysts, the current outlook for both precious metals and stocks remain in one direction. Up.