Cramer Speculates About Impending Gold Rally
With the current rapid decline of gold prices, Jim Cramer has voiced his opinion of a possible significant gold rally in the near future. Reports show that the largest gold speculators have dropped their gold futures to levels well below what they have been for quite a number of years. This negative outlook has forced the price of this precious metal down to just slightly above the $1200 per ounce mark. According to Cramer, this situation is a perfect setup for a huge rally in the near future.
Going by what happened the last time that gold was this low, it is reasonable to expect that a similar outcome may arise. The last time gold prices fell this low was in December 2015, and what followed immediately afterwards was a huge rally. It is quite likely that we could see a repeat of this scenario given the current circumstances. Gold could be headed for the bottom only to rally to levels nearing the $1,350 per ounce mark sometime soon.
The good thing about the current gold situation is that it presents the perfect investment opportunity for those looking to diversify their portfolios and to hedge against market risks. For stock market investors who are worried about the effects of rising interest rates, inflation and trade policies on their investments, the addition of a gold ETF to your investment portfolio may be a great way to have the best of both worlds.
Even with looming and current trade wars, and growing inflation, gold has managed to remain relatively unaffected. But the precious metal is likely to become an investor’s choice if these conditions continue to affect Wall Street. No doubt stock markets will be negatively affected by these circumstances. What better way to safe guard your investments than by adding in some insurance in the form of gold?
In the last 9 months, the price of gold has fallen by as much as 9% and by as much as 2.3% within the last month. But there is still some way left for the price to fall. As soon as that happens, we can look out for the rally. Strong support exists around the $1210 per ounce mark, where the metal is expected to bottom out. The rally is expected to be quick, without any prior consolidation, as tends to happen in the majority of cases with gold.