Gold’s Surge Has Been Disguised by the Strong Dollar

Author: , Post Date: February 13, 2019
image_pdfimage_print

Excerpt from Barron’s

“Gold’s Surge Has Been Disguised by the Strong Dollar”

By Evie Liu Feb. 12, 2019

Cumberland-Advisors-David-Kotok-In-The-News

Gold seems to be out of favor, but that’s only compared to the U.S. dollar.

Over the past two decades, the commodity has actually seen a widespread, strong, and sustained value appreciation around the globe against 72 currencies, according to Ross Norman, CEO of London-based bullion broker Sharps Pixley. That basket of currencies includes developed countries such as Canada, Australia, and Japan, as well as emerging markets including Brazil, India, and Iran. “Using the dollar gold price, as most of us do, has disguised what is actually quite a powerful bull market,” Norman wrote in a note last week.

Admittedly, the real return on gold over the past century has been much lower than other risk-free assets such as Treasury bills. But T-bills today may be less safe now, Fraser-Jenkins wrote.

Global government debt has risen to a near-record level since World War II, posing an increasing risk of inflation through additional capital in the market. The U.S., for example, has seen its national debt relative to gross domestic product grow 86% from 2000 to 2017, noted David Kotok of Cumberland Advisors. And that’s not the highest compared to developing countries such as China at 109%, Mexico at 135%, and Iran at 233%.

Read the full article at Barron’s (subscription required).

cumber map
Cumberland Advisors® is registered with the SEC under the Investment Advisers Act of 1940. All information contained herein is for informational purposes only and does not constitute a solicitation or offer to sell securities or investment advisory services. Such an offer can only be made in the states where Cumberland Advisors is either registered or is a Notice Filer or where an exemption from such registration or filing is available. New accounts will not be accepted unless and until all local regulations have been satisfied. This presentation does not purport to be a complete description of our performance or investment services. Please feel free to forward our commentaries (with proper attribution) to others who may be interested. It is not our intention to state or imply in any manner that past results and profitability is an indication of future performance. All material presented is compiled from sources believed to be reliable. However, accuracy cannot be guaranteed.
Loading...