Kitco: Think You Know Gold Stocks?

Gold has continued to trend higher. It continues to beat the market year-to-date, even with stocks near all-time highs. Investor interest in gold is staring to perk up. But understanding the right reasons to own gold is crucial.

The good news? Gold production is on the rise globally. But that rise is being more than met by demand for central banks. This demand remains robust, and growing. Meanwhile, retail investors have largely been on the sidelines as gold prices continue to rise.

Several short-term factors are helping to push gold higher. One is central bank buying, which provides a massive support for prices above retail buying.

Another is geopolitical risk fears. Global tensions remain high. And that tends to help support gold.

Finally, the trend in commodities has started to look bullish over the long-term, going back to 2020. That suggests that commodities are in the early stages of a bull market. Commodity bull markets tend to last for nearly a decade, with the largest gains occurring near the end.

That suggests that most investors are likely under-allocated to gold right now. As retail investors pile in, there may be a big price spike. But that might be a good sign for today’s investors to take some profits in gold and gold mining stocks off the table.

To read the full analysis, click here.