The end of May was not good for gold. The precious metal ended the month with the biggest weekly drop since September, just as stocks kept climbing upward to new all-time highs. The question for gold bugs is will the downtrend for gold continue as investors' appetite for risk seemingly grows every day.
Peter Schiff, author of The Real Crash - America's Coming Bankruptcy, says don’t miss out on owning gold here. The noted gold bug says in the attached video that gold experienced “a lot technical-related selling,” and that “the fundamental news kept improving for gold, but people weren’t noticing.”
The ‘fundamental’ reason why Schiff sees gold rising is due to the U.S economy, with the Bureau of Economic Analysis last week releasing a revised negative 1% print for Q1 this year. “The U.S. economy is dramatically slowing down, I think that’s going to continue,” he says. “At some point gold traders are going to wake up to the reality that the U.S. Economy is going back into recession, unless the Fed comes in with more Q.E., which I think it’s going to do, and that’s extremely bullish for gold.”
A prediction for further Q.E. isn’t the only surprise Schiff revealed recently. In an odd about-face, Schiff has now decided to let investors use bitcoin to buy gold through his firm, with exchange Bitpay acting as an intermediary.
Schiff appeared on Breakout earlier this year and banged the table on bitcoin being inflated, and has said elsewhere that the digital currency was turning into a “tulip-mania” asset bubble. For a man who sees the digital currencies as without value, Schiff claims it makes perfect sense for him to be in the middle of this trade.
“I’m simply letting people who have bitcoin, if they want to have gold instead, I’m trying to make it easier for them to exchange their bitcoins for gold.” Schiff says he will take investors’ bitcoins, use the service Bitpay to exchange the bitcoin for dollars, and use the dollars to buy gold for his investors.
Although Schiff grudgingly admits bitcoin has value, he claims he’s merely allowing bitcoin owners to diversify into gold if need be, while continuing to reiterate that the digital currency is in a bubble. In the world of finance this type of activity is called hedging, and Schiff’s been in the game long enough to know even the pros need to minimize risk every now and then.
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