One MarketWatch writer thinks that gold (NYSE:GLD) is the only safe bet for investors to turn to, given the unstable flux in recent market activity, rising VIX (NYSE:VXX) levels, and a swath of dragging economic indicators. As the Fed continues to throw money at the problem, offering the economy adrenaline injections in the form of “Quantitative Easing” initiatives, it remains unclear how great of an impact stocks and currencies will feel from the monetary stimulus, and how the inflow of money may contribute to over/under-valuations in price levels.
The uncertainty in common stock holdings and currency trades related to QE initiatives has both institutional and amateur investors dumping money into commodities markets. Just yesterday, we reported that the ten largest banks on wall street made a slew of money on commodities in the first quarter, with commodities representing the fastest growing portion of their fixed income business. Gold and Silver (NYSE:SLV) have also seen major gains in the first quarter this year.
Does conventional wisdom indicate that these trends in commodities investing will continue, especially with a number of influential financial figureheads (Steve Forbes is one) pushing for a return to the gold standard? As budgetary concerns continue to cause standoffs among legislators on capitol hill, and with Moody’s (NYSE:MCO) threatening to downgrade its outlook on US bonds, the US Dollar now too occupies precarious territory for investors. With these looming dilemmas, gold is looking better and better for investors seeking stable long-term returns on their capital.
Writer Kevin Marder in on board, predicting a summer bull-driven market for the precious metal, saying, “We believe the GLD could be purchased at current levels and would use 141.80 as a protective sell stop in case we are wrong.”
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