Although the price of gold is up some 25 percent so far this year, the metal still remains 30 percent below its all-time high of $1,924 registered in September 2011 – so there’s still plenty of room overhead for the price of gold to move higher – as I think it will – without excessive resistance.

I’m no gold bug – but I have been “super bullish” on gold for the past few years. Now, I think the yellow metal’s day of reckoning is quickly approaching.

A decisive break above $1,400 an ounce could be just around the corner – and, to my mind, would signal the start of gold’s next major advance.

Indeed, it looks like gold is setting itself up for a major price advance that will see the metal challenge its previous historic high in the next few years – and, longer term, continue into still higher virgin territory.

Near term, gold prices will continue to be “data driven” – that is dependent on the flow of economic news as it affects expectations of Federal Reserve interest-rate policies. Good news leads to expectations of a near-term rate increase and a weaker gold price. Bad news leads to expectations of continued near-zero short-term rates and a higher gold price.

But, whatever the news in the weeks and months ahead, I believe the Fed will have little room to raise interest rates by anything more than a token increase. What’s more likely, the U.S. and global economic news will continue to disappoint – and this could be enough to support a rising gold price.

Another near-term catalyst could be seasonal buying from both India and China, the world’s two-biggest gold-buying nations. Gold demand in India has a strong seasonal component, reflecting the annual monsoons, the associated rise in agrarian incomes, and the autumnal festivals beginning in September.

Gold demand in China also typically picks up late in the year in anticipation of the Lunar New Year holiday in January 2017. In addition, once it is clear we are in a rising market, Chinese gold buyers are likely to chase the market higher, fearful of missing out on still-attractive prices.

In past Commentaries, I have written of the shift in gold ownership to “strong hands” in Eastern markets (led by China and India) from “weak hands” in Western markets (led by the United States and Europe). This tendency has allowed for an orderly recovery in the price of gold over the past few years.

Now, however, we are beginning to see rising competition between Western buyers and Asian buyers – and greater day-to-day price volatility.

Key to the bullish outlook, as Western investors and institutional speculators collectively decide that it would be good to own more of the metal, they will find a shortage of “available supply” – with buyers increasingly having to pay a higher price to encourage sellers to part with their metal – and probably much higher than the past historic peak of $1,924 an ounce reached in September 2011.

Importantly, several thousand tons of gold have gone into the Asian region in recent years . . . yet not one ounce of gold will come out during the next few years despite the much higher prices that lay ahead.

I recently sat down with Mining.com to talk about gold and the outlook for the yellow metal.  Here's a summary of that conversation:  

Jeffrey Nichols has been a precious metal economist for over 25 years, so if there’s someone who knows every nook and cranny of the gold market, that is him.

Like many others, including American lawyer and author Jim Rickards and RBC Capital Markets, he has been predicting that the price of gold is going rise before January 1, 2017, especially taking into account that it has been up by 25% for the past six months.

“This is far better than the major stock-market averages,” he wrote in a recent op-ed. “The reason I mention this is that gold has been trading inversely to equities – and, consequently, the yellow metal stands to gain much when Wall Street tumbles, an outcome that seems increasingly likely as world stock markets edge higher despite widespread expectations of slow economic growth and disappointing corporate earnings.”

His prediction? “I think there’s a good chance that we’ll get to $1,400 before the end of the year,” he said Wednesday, in a phone interview from New York City.

That price -he added- would mark a pivotal point that would signal “the beginning of the next phase in the gold boom market.” Before too long, he sees the price of an ounce rising above the all-time high of $1,924 registered in September 2011.

Nichols, a senior economic advisor to precious metals asset firm Rosland Capital, believes there’s a good chance that gold will get to $1,400 before the end of the year.

But, despite the optimistic outlook and sudden spikes such as the $58.8 hike in one day following Brexit, Nichols says that change is not going to happen overnight.

He anticipates the price will drop further in the next few days or weeks. “There are a bunch of statistics showing the economy is a little stronger, so the markets believe that that means the Fed might increase interest rates sooner rather than later. That puts downward pressure on the gold price.”

Over time, the expert explains, these short-term factors become less important and what becomes significant is investment demand from large institutional investors, hedge funds, and large-scale speculators.

Looking beyond North America

Rosland Capital’s advisor also emphasized that it is crucial to understand fluctuations in the price of gold from a global perspective. “What matters isn’t only US economic activity and policy, but factors that influence demand in other major market areas, in Europe, in Asia, particularly in China and India, where the driving forces can be much different from what we think here in North America.”

He said that the next few months will see a rise in demand from India, given that the country is having a healthy monsoon season that is yielding large crops and, therefore, is increasing incomes in the agrarian sector.

“Farmers are very much gold-oriented and they tend to buy gold not only as an investment, but for cultural and religious reasons,” Nichols said. “For some of these people there’s really little alternative to gold, because they’re very much rural, outside of the cities, they don’t necessarily have access to banks and to broker firms, and what they traditionally do, as a store value and as a form of saving, is buy more gold when they have more income.”

Similarly, he explained, the Chinese demand is driven by higher incomes and has very little to do with what is happening in the United States and in western economies.

The expert pointed out that the key thing to take into account is that, once they buy gold, both the Chinese and the Indians are very unlikely to sell it back to the market. “They are not short-term investors, who are trading-oriented, so much as long-time savers and consumers of gold jewellery, too.”

On top of these individual buyers, China’s central bank, together with Russia’s, has been aggressively purchasing gold in recent years. These institutional players are also prone to hold onto their bullion.

The result of such practices is a reduction of the available supply. “It means that when investors in the western markets, U.S., Europe and so forth, return with force to the gold market, they find that they have to be more aggressive in bidding the price up in order to affect their purchases,” Nichols said.

Now or never?

Given the aforementioned context and forecast, Jeffrey Nichols is seeing more hedge funds and institutional speculators switching from gold-sellers to buyers. “Some of it has to do with their own interpretation of fed policy; some of it has to do with hedging stock market risk; some of it has to do, simply, with their feeling that gold is now at a point where it’s more likely to rise, so they jump on the bandwagon,” he said.

Even though he understands that there is no golden rule for everybody and that it all depends on what each investor owns, he does have a piece of advice. “They should put 5% to 10% of their investable assets in physical gold. For many, that’s bullion coins, small bars…”

I don’t like to make short-term predictions about the price of gold – people who do are usually very lucky or very wrong.

But times they are changing . . . and we are entering a new phase in gold-price action where expectations of Fed interest-rate policy will become less important and other, more bullish, gold-price drivers come to the fore.

Just look at the past few weeks or even, for that matter, the past year: The day-to-day, week-to-week, fluctuations in the price of gold have been almost entirely a reflection of the gold-market’s expectations of prospective Federal Reserve interest-rate policy.

More fundamentally, news of an improving economy triggered expectations that the Fed would raise interest rates by 25-basis points at its September Federal Open Market Committee meeting . . . and expectations of higher interest rates, even a meager quarter-percent rise, predictably brought gold prices down.  In the event, the Fed opted keep rates virtually unchanged — but signaled a possible quarter-point increase at their December FOMC policy-setting meeting.

Meanwhile, news of an economy struggling to maintain any upward momentum has had the opposite effect: Expectations that the Fed would dare not tighten by raising rates supported yet another rally in the price of gold.

But, to my mind, this way of thinking about gold-price prospects is naïve. Indeed, the belief that a 25-basis point hike in the Fed funds rate, the key policy instrument of the central bank, would send gold prices sharply lower makes no sense.

At the risk of oversimplifying, prices of other financial instruments, financial instruments that also compete with gold, fluctuate far more than a quarter-percentage point, not just from day-to-day but even intra-day!

Moreover, large-scale fund managers, institutional speculators, central-bank reserve managers, even retail investors buy and sell gold with expectations that prices are going to go up or down much more than suggested by a meager 25-basis points – or even several percentage points – in a fairly short time span.

Importantly, they also buy and hold gold for a variety of reasons, reasons that cannot be easily quantified in a small rise or fall in interest rates, reasons such as portfolio diversification, financial insurance, inflation protection, hedging stock-market risk, etc.

Most important, much of the world’s gold trading and purchases — whether for investment, reserve diversification, jewelry, cultural or religious practices — takes place in China, India, and other Asian countries.  Indeed,  participation from this region is hardly governed by U.S. monetary-policy considerations.

But, whatever the news in the weeks and months ahead, I believe the Fed will have little room to raise interest rates by anything more than a token increase, if that. What’s more likely, the U.S. and global economic news will continue to disappoint – and this could be enough to support a rising gold price.

Another near-term catalyst could very well be seasonal buying from both India and China, the world’s two-biggest gold-buying nations. Gold demand in India has a strong seasonal component, reflecting the annual monsoons, the associated rise in agrarian incomes, and the autumnal festivals beginning in the September-October period.

Gold demand in China also typically picks up late in the year in anticipation of the Lunar New Year holiday occurring this year in January 2017. In addition, once it is clear we are in a rising market, Chinese gold buyers are likely to chase the market higher, fearful of missing out on still-attractive prices.

Gold has once again surprised. This time, news from “outside the market” set in motion a chain reaction that knocked gold for a loop.

First, the British confirmed the country was withdrawing from the European Union . . . and sooner than most had expected. This triggered an instant devaluation of the British pound and a corresponding rise in the U.S. dollar in world currency markets.

Not surprisingly, as the dollar rose, gold took it on the chin, as it most often does when the U.S. currency appreciates.

At the same time, contributing to the dollar’s recent appreciation has been a string of favorable U.S. economic statistics that, in turn, raised expectations the Fed might sooner rather than later raise short-term interest rates, perhaps even by yearend.

Once the dollar started its ascent, gold’s short-term fate was sealed . . . and its downward decline was further fueled by technical selling at key chart points, much of it computer driven, that is to say without any human intervention!

Now, most immediately, having shed some $75-to-$100 an ounce in a matter of days, we are seeing some technical support and bargain hunting as gold tests the $1250 level.

If this key chart point holds, as I think it will, gold could soon be on the upswing again. But if it can’t hold, watch out for another possible washout prompted by a further wave of technically-driven speculative selling that takes gold down another notch before a long-lasting upswing gets underway.

Giving us some comfort has been the observation that much of the recent selling has come from large-scale speculators operating in futures and forward dealer markets. Meanwhile, physical demand from retail investors and, most importantly, hedge funds and other large-scale institutional investors has remained firm.

Lately, as gold prices have dropped, these institutional players have added to their holdings via exchange-traded funds (ETFs). Gold ETFs now stand at over 2000 tons, near the highest level in over three years. I expect this market segment will continue to grow – especially as some fund managers seek bargains at recently depressed price levels.

Adding to my sanguine view of the recent price decline has been the absence in recent days of Chinese participation in the market – either as buyers or sellers. China is the world’s largest gold market – and ordinarily one might have expected the Chinese to easily absorb much of the gold sold this past week in the United States and European markets.

When Chinese investors return, at whatever price level, they’ll sense a bargain. And, their buying alone should be enough to stabilize the price and re-launch gold on its long-term upward trajectory.

Regardless of who moves into the White House this coming January, gold prices are set to zoom in the years ahead – in my view, more than doubling during the next President’s term.

What many Western investors – particularly Americans – still fail to realize is that investment demand for gold knows no boarders. Indeed, it will be the growth in physical demand for gold – from India and greater China – that drives gold prices to unheard of heights over the next several years.

Political and social developments – especially the growth in middle classes with investible incomes in these countries – will be more important than who’s occupying the White House.

But short term, what matters most to gold-price volatility during the run-up to next week’s vote is uncertainty:

• Uncertainty about Secretary Clinton’s legal situation and the on-going FBI investigation;
• Uncertainty about prospective trade, monetary, and fiscal policies depending on which candidate is elected;
• And uncertainty about financial-market and economic prospects under one or the other candidate.

We can only speculate how gold prices might react to the election of one or the other candidate.

Clinton is viewed as the candidate of the status quo – with little change in policies from the Obama Administration and, unless the Democrats gain control of the Congress, four more years of political gridlock in Washington.

My guess is that Wall Street and foreign stock markets would be relieved by a Clinton victory, with equity prices posting brief, but possibly significant, short-term gains --and gold giving up the gains it registered in the weeks immediately prior to the election.

On the other hand, Donald Trump is viewed as an unpredictable candidate whose policy proposals are arbitrary and capricious.

His tough, protectionist, anti-trade stance could trigger selling on Wall Street and equity markets around the world – pushing the global economy into recession, undermining the dollar, and boosting safe-haven demand for gold.

At the same time, Trump’s maverick behavior and his scary talk about prospective U.S foreign policy – with respect to relations with allies and foes alike – raises perceived geopolitical risks and could trigger a rush into gold.

Although the election is just days away, there remains the possibility of more surprises – from the FBI, from the Donald Trump camp, or even from the Clinton campaign – with implications for gold-price volatility in the days ahead.

Contrary to expectations, ours and nearly everyone else’s who pay attention to the price of gold, the yellow metal has, since Election Day, shed nearly 15 percent of its value in U.S. dollars.

According to the pundits who pay attention to such matters, the election of Donald Trump should have pulled the rug out from under stock prices, hammered the dollar against other major currencies, and propelled gold sharply higher.

But once again the pundits have been proven wrong: Stock prices on Wall Street have zoomed to new historic highs and gold has, once again, disappointed.

Despite this failure to perform, our long-term positive outlook for gold remains unchanged.

In retrospect it is easy to see what happened: Investors and speculators expected a shift in fiscal policy – regardless of the election results – with increased government spending, rising Federal debt, and higher interest rates.

The expected rise in Federal spending gave Wall Street a boost up despite expectations of higher interest rates, expectations that might have otherwise been a drag on equities.

At the same time, a spate of favorable business indicators raised the probability the Federal Reserve would soon shift to a less accommodative monetary policy. Higher interest rates boosted the U.S. dollar’s value in world currency markets . . . and, in turn, a stronger dollar depressed the dollar price of gold.

Like a self-fulfilling prophecy, hedge funds and other institutional speculators were quick to buy equities and sell gold once it looked like a quick buck could be made on the trade – with more players jumping in once it looked like these trends were continuing.

One thing is for sure: In the short run, financial markets – including gold – dance to their own tune and short-term forecasts, even when based on serious analysis, are often wrong. Hence, to minimize risk and assure lasting returns, we advocate diversification and the inclusion of physical gold in every investor’s portfolio.

Over the long term, however, fundamentals do matter . . . and, over the long term, we feel increasingly comfortable with our long-term bullish forecast with gold prices rising to unimaginable heights.

Indeed, despite the metal’s recent disappointing performance, the price of gold is likely to zoom much higher in the years ahead, perhaps doubling or even tripling from recent levels by the end of the president-elect’s four-year term.

Contrary to the experience of the past few years, gold’s long-run prospects are less dependent on U.S. monetary and fiscal policies or on interest rates and the dollar . . . and more dependent on demographic trends in China and India, trends that virtually guarantee growth in demand from the expanding middle and wealthy classes in these two gold-friendly countries.

In addition, less certain – but potentially very significant for boosting the metal’s future price – is the very recent relaxation of Islamic Sharia law and the associated regulatory changes that will make possible investment in physical gold and other related assets by millions of religious Muslims around the world.

Last year’s big surprise in the world of gold was the failure of prices to move higher. Even strong physical demand for the metal and election-related uncertainties following Trump’s surprising victory could not underpin a sustainable rise in the price. Instead, expectations of higher interest rates, an appreciating dollar, and record-high equity prices held the yellow metal down.

Now, it seems gold may have finally turned a corner . . . with prices for the yellow metal beginning their long march upward, a long march that will eventually carry the metal to new historic highs.

But, even if the latest rally turns out to be another false start, I remain super-bullish for the long term.

As I’ve said many times, I don’t like making short-term predictions about the future price of gold. People who do are usually very lucky or very wrong.  In the short run, financial markets, including gold, dance to their own tune – and short-term forecasts, even when based on serious analysis, are often wrong.

That said, I still think there is a real chance the price of gold will recover much of the ground lost since hitting its all-time high near $1,924 an ounce in September 2011.

But the longer-term outlook is another story!

Over the long run, however, fundamentals do matter . . . and, over the long run, we feel increasingly comfortable with our long-term bullish forecast of gold prices rising to unimaginable heights. If not this year, the chances of gold soaring will rise from year to year.

Indeed, contrary to the disappointing experience of the past year, the price of gold is likely to zoom much higher in the years ahead, perhaps doubling or even tripling from recent lows by the end of president-elect Trump’s four-year term.

Here are some of the reasons supporting my audacious long-term forecast:

Strong hands: In recent years we’ve seen a shift in gold ownership from weak hands to strong hands, from American and European hedge funds and other institutional investors to Asian hoarders – both private-sector buyers and central banks.

When sentiment in Western markets turns more favorable toward gold, those investors and speculators who were quick to sell or short the metal for a quick profit on the way down will find it difficult to restore their long positions except at increasingly higher prices.

In other words, a shrinking supply of readily available gold will be insufficient to satisfy rising demand for gold from many of those who not long ago were eager sellers.

Moreover, the contribution to new supply coming each year from global gold-mine production is now shrinking – and is set to continue declining for the next five-to-ten years. Gold mining is a high-risk endeavor with the time from exploration, development of new discoveries or expansion of existing mines, and eventual start of production, a multi-year endeavor.

Asian demand: China and India are, by far, the world’s biggest buyers of gold with each country’s annual demand near or above 500 tons. Despite year-to-year fluctuations, their voracious appetites for gold will continue to grow as their economies grow and their middle and wealthy classes expand.

China’s government is intentionally pursuing pro-gold policies, taking concrete steps to develop its domestic gold-market infrastructure by encouraging the development of domestic physical and futures markets. And, it’s central bank, the People’s Bank of China, has bought, on average, roughly 15 tons each month in the last dozen or so years.

India is a much different market for gold. The yellow metal is deeply embedded in Indian culture and religion – and serves as a vehicle for saving and accumulating wealth in lieu of distrusted Western-style financial institutions. Over the years, the government has tried to discourage gold demand by imposing onerous regulations and import taxes – but the more it tries the more people want to hoard the metal.

The Indian government’s recent effort gain more control over its banking system by recalling 500 rupee and 1000 rupee banknotes will further damage confidence in the government and financial sector – and raise long-term interest in gold as a store of value.

Growing Islamic demand for gold: Another potentially significant source of demand for the metal – with possibly huge price consequences – is the recent relaxation of Islamic Sharia law with regard to gold and the associated regulatory changes that will make possible investment in physical gold and other related assets by millions of religious Muslims around the world who, until now, eschewed gold. Many have great wealth – but strict interpretation of Sharia law has heretofore limited or prevented their investment in the metal.

Gold prices of late have been testing support just under the market, if you will, preparing for a healthy rally into higher territory.

As I see it, a relatively small group of hedge funds and institutional speculators have been calling the tune for gold, trading the recent range, buying on dips, selling on rallies, and gradually adding to their physical holdings – a behavioral pattern we expect will continue within a rising trading range – at least until a price well above the $1300 an ounce level is well established.

Contributing to support under the market, price-sensitive Asian traders continue to bottom feed, accumulating bullion for the billions of gold-friendly households in their region with cash to spend.

Meanwhile, short-term hour-to-hour and day-to-day price action has been governed by the latest news with respect to interest rates, inflation, the dollar, and Tromp’s troubles in the White House.

Real Rates Matter Most

With respect to prospective interest rates, a growing number of financial-market participants believe an increasingly hawkish Fed will vote for a quarter-point hike interest-rate hike as early as March when the FOMC, the Fed policy-setting committee, next convenes.

Conventional wisdom suggests that rising interest rates should be bullish for the dollar and bearish for gold.

But while nominal interest rates may be rising in the next few weeks and months, real “inflation-adjusted” interest rates are already falling, as evidenced by rising inflation rates – note this week’s consumer price (CPI) and producer price (PPI) reports both rising 0.6 percent for the past month.

In my view, an accelerating U.S. consumer-price inflation rate will outpace any increase in nominal rates brought about by the Fed – a trend that will contribute to record high gold prices in the next few years.

For the immediate future, the next few weeks, confusion at the White House and a weakening President may also benefit gold as Trump’s radical policy initiatives lose support, among Republicans in the House and Senate, and the ship of state seems increasingly rudderless.

Fasten Your Seat Belts

Looking further forward, possibly even by the end of this year, there is a real chance the price of gold will recover much, if not all, of the ground lost since hitting its all-time high near $1,924 an ounce in September 2011.

For many years now, gold – real physical metal, not just paper proxies – has been moving from weak hands in the West to strong hands in Asian markets. When gold heats up, I expect a shortage of available supply, reflecting this geographic shift in ownership, will trigger a bidding war for gold, driving prices to unimaginable heights within the next few years.

Islamic Demand — Import Overlooked

Another significant source of physical gold demand – with significant price consequences – results from the recent relaxation of Islamic Sharia law making possible investment in physical gold by millions of religious Muslims around the world who, until now, eschewed gold. Many have great wealth – but strict interpretation of Sharia law has heretofore limited or prevented their investment in the metal. Within the next few years, we think Muslim demand could reach 500 tons a year, placing these investors on a par with China and India as a long-term sponge for gold.

Despite last week’s move by the U.S. Federal Reserve, America’s central bank, to tighten monetary policy a notch, gold prices surprised many observers of and participants in the gold scene who had expected the quarter-point increase in short-term interest rates would be sufficient to knock the metal into a still-lower trading range under $1,200 an ounce.

After all, higher interest rates are widely perceived as a negative or bearish influence on the gold price. But, as noted below, it is really the “notional” real “inflation-adjusted” rate of interest, that matters, not the “nominal” rate as might be quoted by a bank or other lender.

Not only did the Fed dial up short-term rates by a quarter percentage point, it suggested further tightening might come later this year and next, depending on economic performance and inflationary tendencies in the months ahead. Yet, contrary to popular expectations, gold prices still moved higher despite the Fed tightening.

It just might be that inflation expectations are suddenly on the rise, as financial markets get a grip on the Trump Administration’s economic and protectionist trade policies.

Having fallen briefly a tad under $1,200 an ounce in the days leading up to the Fed’s policy announcement last Wednesday, the yellow metal ended last week at $1,230 an ounce – a gain of some 2.5 percent over the prior week and 15 percent from year-end 2016.

And, by today (Tuesday, March 21^st), gold has advanced to more than $1,240 an ounce!

Moreover, it now looks like prices are set to move still higher. In the short run – measured in hours, days, and weeks – hedge funds, commodity funds, and other institutional speculators are both reacting to and contributing to the market’s upward momentum.

Traders don’t want to miss out on a good party, let alone a major move up into a higher bracket. As they wade deeper into the market, stepping over and breaking through important trading levels, the market’s upward momentum is attracting still more buying, advancing the rally still further. Before long, a growing number of traders will see more than just another rally but a firm resumption of the long-term bull market.

Indeed, the market is now at an important juncture with key fundamentals and technical trading setting up the possibility of a self-fulfilling prophecy where buying begets more buying – all of which is fueled by increasingly bullish fundamentals.

First and foremost, despite the rise in nominal interest rates, as “real” or “inflation-adjusted” interest rates continue moving lower, gold looks increasingly more attractive to investors, large and small, around the world.

In other words, as inflation expectations rise, the real rate of interest moves lower and lower – making gold look increasingly more attractive. And this, along with technical factors, market psychology, and the looming possibility of a political crisis in the United States is pushing gold prices higher.

One big surprise in the world of gold thus far this year has been the metal’s lack of price volatility.

This despite:

• All the uncertainty associated with a new, and somewhat maverick, president in the White House compounded by a dysfunctional and highly political Congress,
• The coming withdrawal of Britain from the European Union and the possibility the French will follow suit by pulling out of the EU too,
• The rising tensions between Russia and the United States on two fronts (Ukraine and Syria),
• And, most recently, rising North Korean bellicosity, the real possibility the North will gain nuclear arms capability, and the risk of all-out war (accidental or intentional) in the East Asian region.

There was a time when any one of these developments would have been enough to send the gold price skyward. But, apparently, no longer.

Instead, the gold market seems to shrug off these developments, keeping its eyes focused on the tenor of U.S. monetary policy, particularly the prospect for interest rates.

More precisely, what the gold market is really interested in these days is the “real” or “inflation-adjusted” interest rate. Even if the Federal Reserve boosts its Fed-funds policy rate, say by a quarter percentage point, if inflation expectations rise by more, this combination spells a more expansionary (or less restrictive) monetary policy.

Taking this line of thinking a little further, business-cycle indicators – such as housing starts, employment data, consumer spending, or industrial production, for example – that point to a slower-growing economy, lead traders and investors to expect more accommodative (or less restrictive) monetary policies with lower real interest rates – and, therefore, higher gold prices.

Of course, the opposite is equally true – a stronger economy allows the Fed to raise nominal interest rates. But, so long as these higher rates are exceeded by rising inflation expectations, in actuality, lower or even negative real rates will be supportive of a arising gold price.

We have long espoused the view that the U.S. economy is caught in a long-term multi-year period of secular stagnation characterized by slower than normal economic expansion with disappointing employment and wage growth for many. Unless economic policy-makers and politicians recognize this reality, they will err of the side of excessive monetary growth with lower real interest rates – a favorable mix for gold investors but not a recipe for maximum prosperity for America.