Making a case for gold’s long-term potential, the Aden Sisters told listeners at their MoneyShow presentation that the precious metal is the best safe haven, dating back more than 5,000 years.
Describing the yellow metal as a hedge in times of uncertainty, Pamela Aden recapped the market volatility of the last five months, saying it’s time for people to protect their savings and investments.
“A perfect storm is taking place … during an election year that’s crazed with a health pandemic, economic collapse, racial conflict, millions unemployed, anger, protests all linked together,” she said.
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The investment duo was critical of the US Federal Reserve’s numerous stimulus initiatives.
Calling it the “biggest financial abuse of power,” the Adens took aim at the almost US$7 trillion the central bank has printed — US$3 trillion in the last three months.
“This means we must protect ourselves from the monstrous debt that is going on and the unprecedented COVID-19 money creation to infinity,” said Pamela Aden, repeating herself for emphasis.
She continued, “You just can’t print excessive money out of thin air with no backing and believe we won’t have a hangover — it just doesn’t work that way.”
For reference, the sisters explained that the Fed’s mass printing of money since the onslaught of the COVID-19 pandemic is triple the amount of cash created after the 2008 financial crisis.
Warning of the impact of a potential second coronavirus wave, they noted that another round of COVID-19-induced uncertainty could be more disruptive and harmful than the first.
“Recovery will take longer than you think — the second and third quarters and the second wave are key. That is the key right now for this year to be keeping an eye on,” Pamela Aden said. “As Mark Twain has said, history doesn’t repeat but it often rhymes, and that is so true today.”
In her half of the presentation, Mary Anne Aden recounted the long history of gold as a currency, from the pharaohs to the Romans. The yellow metal has retained intrinsic value through the centuries.
“Now that is what makes gold so special, and during periods of revolution, wars, depressions, inflations, political unrest, economic chaos, gold has always come out as number one,” she said.
According to the sisters, the 1970s gold bull market saw the metal climb 2,300 percent, and the market of the 2000s saw a 600 percent increase in the gold price.
This time around, the price will be propelled by a rapidly rising uptick in demand led by central banks, which have been stocking up on the metal for the last four years.
Central bank buying, combined with health and economic concerns, will be major tailwinds for gold in the months ahead in what the sisters described as a young bull market.
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“We have got some really good upside to go,” Mary Anne Aden said.
“And if this bull market unfolds the way the previous two have, which are really the biggest and the only ones that we have had since gold was allowed to trade in the free market, then we have some really bullish action coming up ahead of us, and gold could rise literally thousands of dollars, far higher than the price is today,” she added.
Agreeing that investors should own physical as well as paper gold, the sisters also offered a few stock picks that they believe will outperform gold and potentially silver.
“A couple of the shares we like: Royal Gold (NASDAQ:RGLD), Wheaton Precious Metals (TSX:WPM,NYSE:WPM) and Newmont (TSX:NGT,NYSE:NEM). We think you just can’t go wrong putting more of your investment capital into the metals.”
Gold’s sister metal was also a topic of the 30 minute presentation. The Adens briefly touched on the white metal’s attributes, pointing out that it is worth investor attention in the current cycle.
“During bull markets silver does better than gold, and so silver is historically undervalued compared to gold,” Mary Anne Aden said.
Recommending Pan American Silver (TSX:PAAS,NASDAQ:PAAS) as a good investment, she pointed out that silver shares have remained firm in recent weeks, while gold shares have softened.
“Silver kind of woke up these past few months, and that is what it usually has done in the past,” she said. “It tends to be a sleeper, and then when it wakes up it goes.”
The pair anticipate that a seasonal lull in late summer could provide an ideal period to purchase shares ahead of another price run up.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
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