Gold has already had an amazing run in 2016, with futures rising 24% in the first half of the year. But that doesn’t mean investors should avoid buying the precious metal now. That’s the view of Anthem Blanchard, CEO of precious metals dealer Anthem Vault, which holds $2 billion in client assets.
“The trade has really just begun here,” he recently told Yahoo Finance. “I think it’s very limited, the risk. I think there’s a ton of upside in the price. I think in relative terms it’s a very safe time to buy. I don’t see a lot of downside. ”
Britain’s recent vote to leave the European Union gave gold its most recent jolt, sending spot prices to a two-year high of $1,358.20 an ounce. Prices have dipped since then and Blanchard, while bullish, doesn’t expect huge moves in the short-term.
“I expect in the next week or two we might see gold prices in dollar terms stay relatively flat just because I think we’ll see a flight to safety also in US dollars and Treasuries temporarily,” he said. “But ultimately this bodes very well, the Brexit decision.”
Long-term, Blanchard argues, Britain’s decision opens the door for other countries to leave the EU and stop using the common currency. He says diminished demand will ultimately hurt the Euro’s value. “So ultimately that can create a lot of credit risk in the markets, a lot of derivative risk and that bodes very well for gold and silver demand,” he said.
Part of Blanchard’s optimism about long-term gold prices rests on the argument that the metal is under-owned by investors compared to other assets. And, as you might expect from a gold dealer, he recommends people own actual gold and not just exchange-traded funds that own the metal.
Ultimately, Blanchard’s case for gold comes down to its long history of value. “There’s always been a bid, there’s always been liquidity, someone’s always been willing to buy gold for thousands of years,” he said. “And we just don’t foresee that changing that in the next few years.”
By: Antony Michels (Yahoo).
Photo: LinkedIn.
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