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Gold's Turn To Shine

Adam Hamilton profile picture
Adam Hamilton


  • Gold’s turn to shine is coming. This leading alternative asset’s secular bull is set to resume with a vengeance in 2022 and beyond.
  • The Fed is leaving all the many trillions of new dollars it conjured up during QE4 in the economy, where they will continue to bid up prices driving raging inflation.
  • Gold will rise proportionally to reflect a more-than-doubled money supply, climbing to way-higher prices. Fed-rate-hike cycles are no threat, as gold has averaged strong gains through all modern rate-hike cycles.
new year 2022 with golden piggy bank

AntonioSolano/iStock via Getty Images

Gold’s turn to shine again is nearing, with major bullish drivers aligning heading into this new year. The Fed’s vast deluge of new money remains intact despite QE tapering, continuing to fuel raging inflation. A new rate-hike cycle to fight that is looming, but gold

This article was written by

Adam Hamilton profile picture
A lifelong student of the markets, speculator, and investor, decades of experience have forged Adam into a hardcore contrarian. He believes in buying low when others are afraid, then later selling high when others are brave. He founded the financial-market research company Zeal LLC, and continues to write acclaimed weekly and monthly subscription newsletters.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

I own extensive long positions in gold stocks and silver stocks which have been recommended to our newsletter subscribers.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (25)

Gold $1,000 to $1,800.
S & P 2200 to 4400.
What would a graph of your articles coming out vs. gold taking an immediate plunge look like? It's never good to be married to a thesis or base predictions on a vastly different past.
Fischel profile picture
In 2020 a madman was President of the US, and around August 2020 the outcome of the covid was much less clear than it is now, no vaccines then either.

Otherwise, people, en masse, do not seem to be on board a gold train. The central banks hold gold, but seem to give gold much respect, at least not the US central bank. Waiting for an international macroeconomic battle could take a very long time
@Fischel, “gold will make you old” but that’s okay - it is the contrarians who make the money, not the thundering herd.

My Top 2 Picks for 2022: AEM, then NEM. I own both and have for many years.
@Fischel what does your post even mean? Zero credibility when you pull out the unnecessary Trump hate. Think we are better off with the low IQ, senile tool in charge now? And are you implying the jabs you seem to favor happened because of the current administration?
@POC Flyguy Word. And even more insane is the lack of tests available. Biden and his bag of tools declared victory over Covid in the summer when they should have anticipated variants. The variants caught them by surprise, which should be shocking, but then we are dealing with someone who can't even stand for a press conference.
May be the 20th paper in the last 12 months predicting momentum on gold because of money printing, FED behaviour, blablabla.... At the end of the day, gold will rise if they are more buyers than sellers, and it will happen if other assets real yields are worst than gold, which is zero
Veritas1010 profile picture
It is inevitable.

The question has and will be than potent one word: When?

Awaiting the inevitable is akin to “waiting for Godot”.

However, I’m not selling anytime soon!
Print, borrow, debase. What could go wrong ??
donzoab profile picture
Sorry. Goldbugs continue to be wrong. The new generations don’t want good. Bitcoin and other cryptos will continue to take money from gold and silver
Inflation will moderate next year
Fed will raise rates slowly
Sell every gold rally and trade it off lows but if you’re an investor, this is trash. Tech, healthcare and reits handily outperform gold year after year.
@donzoab, you’re a great contrary indicator - thank you for serving this vital role!

For 2019, gold/silver miners portfolio: + 35 %.
For 2020: + 37 %.
For 2021: - 14 %.

“You cannot win it if you’re not in it.”
@donzoab ....the gold market is ten times Bitcoin. I think you’re wrong
Fischel profile picture
@Crozbo not really, if you split gold market capitalization into components, and remove the jewelry component and try to isolate the amount of the total market cap that is from investing public buying or trading gold purely as an investment,...
Greed to be replaced by Fear. The S&P 500 continues to defy gravity due to Top 7 and investors stay on the ride. But what when we have a correction? Where do we go, knowing Bonds are a one way bet, and currencies will be debased?

If Gold does not outperform in this conditions it never will.
Chancer profile picture
I agree with most of the article and especially these 2 statements:

"But this cowardly Fed will halt rate hikes fast if the stock markets fall far enough, probably near 20% like during QT."

"The biggest beneficiaries of much-higher gold prices ahead are the fundamentally-superior mid-tier and junior gold stocks."
@Chancer, GDXJ is the proxy for mid-tier miners. Stay with those, not the speculative juniors. Add a nice dollop of seniors AEM & NEM.
See you at the Top!
Chancer profile picture
@Miners to the Moon:

My portfolio right now is up 51%. How are those mid tiers doing now? My only mid tier is my worst performer.

My juniors are individual story stocks- less dependent on gold prices. As long as the gold price is over $1500, they will be OK. When prices of my stocks decline, they drop in pennies, while bigger producers decline in dollars. Most of those that I own have zero debt, which means in a major gold price decline, they may go to sleep but not BK. Just some of the many reasons that I like the space that I focus on.

That is my story and I am sticking to it- and sticking with the niche that works best for me.
@Miners to the Moon They all have warts. There's always something going wrong with every gold miner. There may be a dead cat bounce but the forces pushing gold are pretty powerful. Miners could all see new lows if gold gets slammed regardless of their individual status. The ETFs don't care.
three time loser profile picture
Good article Adam, I also think gold and silver will sneak up and then blast off leaving behind the speculators on the sidelines to chase momentum and kick themselfs in the ass for woulda coulda shoulda
While I am a huge gold fan, I see the analysis here quite weak. The fed has already injected that liquidity into the economy, or should I say, into the banking system not the economy. So any incremental impact it would have has come and passed. Assuming it will somehow have additional impact or a delayed impact on gold is not supported by any precedent or not even argued as to why it would have a delayed impact ton gold I this article. On a seperate note, Fed liquidity does not get injected into the economy, it is injected into the tier 1 banks. Only If the tier 1 banks decide to lend this liquidity out in loans will this money actually end up in the real economy and cause potential inflation. The loans from banks are tanking and not rising fast enough. Banks are keeping that fed liquidity in the banking system, which means it will be used to buy financial assets not real goods and services. So the inflation was in asset prices not in goods and services as a result of this fed liquidity. The inflation in the goods and services was due to the fiscal stimulus and the supply chain issues combined, not the fed liquidity as this liquidy has not means to get into the real economy since it is provided via tier 1 banks only and they only way it could go into the real economy is if the banks lend out, and they are not doing so. Having said that, there is a case for gold rising now since inflation will stay elevated for some months while long duration yields are not rising but in fact dropping due to an economic slowdown that seems to have been triggered since Q3 2021. A flat or stubborn inflation expectations and a dropping long duration yield means real yields are going to fall further which correlates well to rising gold prices historically. But the risk of course is if: A. Inflation spikes and continues higher in which case the long duration yields will have to adjust upward eventually, or B. If inflation Tanks suddenly in Q1-2 2022 as inventory build up done in Q4 2021 faces a weakening consumer demand in Q1 2022 causing deflation in goods prices, in which case the drop in long duration yields might not be enough to compensate for the sharp drop in inflation expectations, causing a temporary rise in real yields.
Fischel profile picture
@mohsen93 you say no precedent for a gold delayed reaction. The 2007/8 financial crisis saw the gold peak in 2011.
@Fischel That period was driven by a massive China stimulus that drove commodities in the face of declining US and global growth into the recession and post recession. Unfortunately, China or others are not introducing any new massive stimulus to drive commodities higher, which, if they did, would combine with a low bond yield (US10Y) that would thus drive real yields Lower and gold higher. There was no massive US monetary stimulus pre 2007 that would have had a delayed reaction in 2008-2011. The US monetary stimulus that was massive was post crisis, not pre. What drove the gold price higher pre 2007 was Chinas stimulus, and post 2008 was the US stimulus. Ie, no 1-2 year delayed reaction. Gold investors are not sleeping while stimulus comes and wake up 2 years later to play catch up. Having said that, Jewellery demand is rebounding in India in late 2021. I expect a rise in gold prices if economic growth sputters and inflation remains slightly elevated but not moving up too fast. I just don’t see the driver being a stimulus that was done over 12-18 months ago. The driver will be the economic growth rate (that dictates the yield on long duration bonds) and inflation expectations, both of which are inputs into the real yield, which is closely correlated (in inverse terms) to gold.
@mohsen93 agree with you. Adam's analysis is flawed for a couple of reasons. As you point out, the huge increase in M3 has not caused inflation to date because the velocity of money has been extremely muted. Could that change in 2022? Perhaps but doesn't seem likely. In addition, claiming gold to be the ultimate inflation hedge is not quite right either. The best actual correlation is gold vs the US Dollar. Go look at that chart. Dollar has continued to be relatively strong, hurting gold prices. And then there's the artificial manipulation of PM prices that these authors never talk about. So while I too have been a gold bull, it has certainly not performed as we would have liked and inflation won't change that unless the dam breaks on the Dollar or velocity of money picks up substantially.
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