Is Gold Undervalued?

The gold market is currently sitting at multi-month highs, and the yellow metal could potentially have more gains in store.

According to a recent article from Kitco.com, the latest Bank of America fund manager survey showed one third of respondents saying that gold was the best hedge against protectionism. The article went on to state that with a net margin of 15%, the respondents said that gold was undervalued. The article then added that this was the second time investor sentiment has reached this level, tying a record first seen in 2008.

Clearly, it would seem that fund managers have no shortage of reasons to be bullish on gold. Although protectionism is a major concern, the survey also cited rising inflation and the threat of stagflation as reasons gold may be undervalued.

On the other side of the ledger, according to the article the same survey showed fund managers are not so hot on the dollar. 41% of respondents viewed the long dollar trade as overcrowded, and the second most crowded trade, at 14%, was the short government bond trade.

The survey presents an interesting point of view that runs against what many investors may be doing. The dollar was heavily bought following the Trump Presidential election victory, while bonds and notes were heavily sold as interest rates began to climb.

The question is: Will the trends in the dollar and rates continue?

Clearly there seems to be some significant disagreement on the outlook for those markets.

Given many of the hurdles gold has overcome in recent weeks, and given the fact that some of the so-called “smart money” seems to be bullish on gold, shouldn’t you consider an allocation in the yellow metal?

Gold has been on the rise, and recent strength could potentially be just the beginning of a major rally that could have the makings of a multi-year cyclical bull market.

Would you rather consider gold at $1230 per ounce or $1500 per ounce?

Gold could potentially see a rapid ascent in price on rising inflation, the potential for a stock market crash, geopolitical issues and more. A major downturn in global stock markets could potentially erase billions in shareholder value in a very short period of time. Gold, on the other hand, could potentially rise by $100 per ounce, $200 per ounce or more very rapidly if risk aversion sets in.

Adding physical gold to your portfolio has never been easier than it is today. Speak with an Advantage Gold account executive today about the potential benefits of physical gold ownership. Advantage Gold account representatives are there to answer any questions you may have about buying and holding physical gold coin and bullion, an can even show you how to buy gold using your IRA account.

Don’t wait for gold prices to rise further or for rising inflationary pressures to erode your purchasing power before taking action. Explore your options for physical gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started today.

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