Gold Stocks: A Contrarian Opportunity

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XAU/USD 뉴스

Gold Futures,United States 10-Year

Commodities Analysis by Frank Holmes covering: XAU/USD, Gold Futures, United States 10-Year. Read Frank Holmes's latest article on Investing.com

is trading just under $2,500 an ounce after surging past the psychologically important level for the first time ever in mid-August. For seasoned gold mining investors, this should be a moment of validation. After all, the yellow metal has long been seen as the ultimate hedge against economic uncertainty.

That's exactly what happened. From the end of 2020 to May 2024, exchange-traded funds backed by physical gold shed approximately 30 million ounces, over a quarter of their total holdings, as yield-seeking investors pared back their positions. This could be just the beginning. If real interest fall substantially, the tide could turn in favor of gold and gold equities.Historically, gold’s biggest gains have occurred when the Federal Reserve cuts interest rates amid economic uncertainty. Although there’s no obvious crisis on the horizon, markets are pricing in a 25-basis point cut at each of the next two Fed meetings in September and November, with a larger cut expected in December.

This is excellent news for general investors, including the record number of “401 millionaires”—investors who have $1 million or more in their retirement accounts. According to Fidelity, there are now almost half a million such millionaires… and growing!

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