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Is A New Commodity Bull Market Good for Gold?

OWNx Team Global Finance and Economics, Gold & Silver Market, News & Commentary

Gold and silver prices have suffered over the past few years through a grueling down market. 2016 appears at this point to have set a firm bottom in place for the price of precious metals. The same appears to be true for a broader basket of commodities. In fact there is a growing number of analysts that believe a new commodity bull market is ready to begin.

Will 2017 Herald a Commodity Bull Market?

If they are right and a new bull market in commodities is beginning, then that should bode well for precious metals. The price of gold and silver bullion have a strong correlation to other commodities over the course of the bull market period.

In the early phases of a turn in the broader commodity markets, gold and silver may lag for a few months depending on monetary policy and economic and geopolitical stability. Both of those are still in question. However, once firmly underway a commodity bull market is inflationary. Gold and silver then take their place as a hedge against inflation.  This makes the onset of a commodity bull market a good time to accumulate gold and silver.

Time will tell if 2017 is indeed the beginning of a new commodity bull market. Some of the conditions are there, which will support gold and silver prices over the intermediate to long term.

(photo credit Dominic Rivard)

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