by Rambus Chartology
Gold plays a duel role as a commodity and as a monetary metal which makes it important to keep a close eye on. During the early stages of a commodity bull market Gold will generally lead the whole complex higher. When the troops see the General leading they will feel more emboldened to have their turn at a bull market. We’ve seen this scenario playing out since the Spring of this year where most of the important commodities have bottomed out and are beginning their new respective bull markets. Gold actually bottomed in late December of 2015 while commodities continued in their bear markets into the Spring of 2020.
As a monetary metal some investors like to use Gold as a safe way to store wealth or as a hedge against inflation. Other investors like to have Gold in their portfolio in case the stock markets crash and the economy goes into a deep tailspin and never recovers again. One thing we do know is that Gold will always have a monetary value and not go to zero which is possible with an individual stock.