I think a bull market on gold is underway. It’s not about to get started, we’re actually in the early to middle innings of one.
Gold has continued to hover around the $1,800 U.S. level for some time, suggesting that investors believe this commodity may have run too far too fast, reaching all-time highs last year.
However, I would suggest that gold continues to remain undervalued based on various metrics. Looking at the amount of stimulus that is being pumped into the economy from central banks (particularly) in the U.S., gold should likely be trading much higher than it is today.
Of course, one needs to believe that inflation and a depreciating U.S. dollar are right around the corner. The U.S. dollar has depreciated already, and some think that currencies like the Canadian dollar are already overvalued. This may be true.
However, as we saw with the last financial crisis, we could see much more depreciation on the horizon.
For those who believe gold is the place to invest right now, I’d highly recommend considering the VanEck Vectors Gold Miners ETF (TSX:GDX) as an option.
This ETF is well-diversified and provides a range of gold miners across the spectrum, from mega cap to small cap. All my favourite gold miners are included in this ETF, as well as a few high-quality silver producers, providing nice diversification and growth potential should a bull market in precious metals play out.
Invest wisely, my friends.
