I have known the Aden sisters for 30 years. They don’t seem to age much. They are famous for their research on all things related to gold. Here, they issue a yellow light.
The past year was frustrating for many investors and with good reason. Nearly all of the markets were volatile and erratic, reflecting global uncertainty. That was especially true in Europe, which affected markets worldwide.
In the end, safe haven investments proved to be the winners, despite all of the volatility.
U.S. government bonds soared 52%, taking top performance honors for the first time in years. Gold gained 10%, making it the eleventh year of consecutive gains.
The U.S. stock market essentially ended the year where it started. But most of the global stock markets were down, along with the international currencies.
It is an odd fact that gold and Treasury bonds have done well for 10 years. “Looking back over the past decade, the story has been similar. Gold has surged 645%, long-term U.S. government bonds have returned about 130%, while the Dow Industrials has only gained 15%.”
They think these trends will continue in 2012.
The Western world is in serious financial trouble. This tells us the uncertainty we saw in 2011 will likely prevail as we move into 2012.
At the same time, growth in many other countries is strong and demand for gold has skyrocketed. This goes for millions of private investors in China and India, for instance, and central banks around the world.
During uncertain times, demand for safe havens intensifies and this should also continue to bode well for U.S. government bonds.
Even though the U.S. has unprecedented debt problems, it’s still looking a lot better than Europe and this will probably keep the U.S. dollar strong as well.
What about gold? “Gold could go lower before it heads higher but it’ll stay bullish by holding above $1,530 and you may want to buy some at current levels. Bonds are similar.”
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