Gold has been a great investment over the last decade, but the precious metal has fallen from its 2011 all-time high of nearly $1,900 an ounce in recent months.
The trajectory for gold could change very soon, says Chris Martenson, CEO & co-founder of Peak Prosperity and a long-time gold bug. He believes the price of gold, which is currently trading at $1600 an ounce, could head much higher.
"Technically it looks like [Gold] could be due for a breakout," he tells The Daily Ticker's Aaron Task in the accompanying interview. He notes the "gigantic flag" that has been forming since last August. After gold hit its $1,900 high, it has been "bouncing down to a perfect wedge" consolidating around $1,550 as the floor.
Additionally, Martenson says there are other core fundamentals that support a run up in gold prices, including:
- Negative real interest rates
- Fiscal recklessness from governments across the globe
- Monetary recklessness from world bankers
If the pennant formation does pull through (see chart below), Marteson believes the price of gold could jump 50 percent to $2500 per ounce.
As for timing, he says the jump in price could happen sooner rather than later, but does not give a definitive time frame. He acknowledges that his technical analysis is a guideline and not a predictor of price. A break to the downside is possible, he adds, but given all the macro headwinds — slowdowns in Europe, Asia and the U.S. — a spike in gold prices is more probable.
He is a fan of investing in gold bullion over ETFs and gold stocks.
"And it should be bullion you can get your hands on," says Martenson, adding the gold should be in safe storage in the country where you live, it must be insured and you must be able to take delivery when you chose.
Based on historical analysis, he suggests allocating 20 percent of your portfolio into gold.
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