Gold: Connecting the Dots
Gold rose 11.63% in US dollar terms in 2017, an excellent year for the metal.
More important, it has been the top-performing asset since the dawn of radical monetary experimentation by world central banks in 2000 (better than equities, bonds, and other key commodities).
The US dollar, anointed “King Dollar” by Larry Kudlow – a view shared by most leading economists at the beginning of 2017 – has been a bust. It suffered its worst annual performance in 14 years, down 9.84% (DXY, an index of the dollar against major currencies).
Still, gold is shunned by mainstream investors. Nonetheless, our outlook for gold for 2018 and beyond is positive. What we believe is a compelling case for investing in gold now is summarized in the bullet points below. We discuss each at greater length in the following paragraphs and attempt to connect the dots from a gold perspective: