In a report recently published by Bloomberg Intelligence, gold has been put in a match against other broad equity market commodities to estimate which one would be more valuable in the long term for investment purposes.
What they believe is that even the latest drop in the price of gold is an indicator of this fact.
For instance, back in late 2020, gold saw to its price and value perhaps one of the sharpest declines in its history, which at the time was rather shocking to everyone, especially investors.
Bloomberg Intelligence states that S&P 500 has extended compared to gold. However, it has gotten closer to its mean value. As they put it:
“With the CBOE S&P 500 Volatility Index (VIX) at about 23% and above the same measure of gold around 19%, the indication from the marketplace is the S&P 500 is at greater risk of a drawdown. The bottom line is the stock market is more susceptible to some form of catalyst that may spark a mean reversion, as seen with gold in 2H. At almost 20% above its 52-week moving average to Jan. 12, the S&P 500 is the most extended since 2010”
Bloomberg intelligence believes that given all these data and statistics, there would be practically no other way for gold but up.
So it is highly expected that with regard to various commodity prices and their movements in the market, the price of gold would only appreciate.
One more reason that analysts have this idea about gold’s price appreciating is the increase in the U.S. money supply. This amount has increased to a great degree of 25 percent.
However, after this increase, gold investments and purchases have not followed yet. This means there is a great vacuum about to be filled. This vacuum will be filled with investors trying and smart traders trying make the best out of this situation and invest in gold at the exact right time.