Author and Precious Metal Broker Shares Reasons Behind Gold's Rise

Appetite for physical gold on the rise even after reaching one-year high.

Official figures, such as soaring prices and volume metrics from precious metals companies, offer some indication of gold's appeal. To author and precious metals broker Bill Holter, however, a more telling sign that the metal is making strides is the burst of interest from first-time investors.

This, Holter told KamloopsBCNow, means that people are finally understanding the volatile nature of currencies and the difficulties of storing your wealth loss-free.

According to Holter, appetite for physical gold has been on the rise even during bearish stretches, and it hasn't dwindled as gold reaches its one-year high.

The analyst believes that money printing is reaching a boiling point and could trigger a monetary reset – in this new world, gold will stand out as one of the very few assets that kept its value through the turmoil.

"We are headed for a monetary reset and the reason we're headed for a monetary reset is there's too much debt outstanding that cannot be paid on the current terms. When I say current terms, I'm talking about with current purchasing powers of the various fiat currencies (or paper money)," Holter explained.

The article states that, as opposed to traditional investments, gold serves as a guarantee of capital preservation, one that offers bullion owners peace of mind in any scenario. One major upheaval could happen due to the piling of credit – Holter says we're in the largest credit bubble in history and that, when it bursts, currencies will go with it.

Part of why gold retains its value so well is that it's finite, as opposed to currencies that governments have been printing carelessly since 2008-2009.

"The amount of gold outstanding and produced since then shows that gold is way, way cheaper than it has been in maybe ever. Gold is extremely cheap in relation to money supplies, in relation to debt outstanding," said Holter. "There's obviously uncertainty in global markets and you're seeing a flow into gold from all over the world - not just the U.S.. It could be looked at as a flight out of fiat currency."

Holter also shares the view of some investors that gold and silver could become scarce due to limited supply – a view that could have significant influence on market sentiment. "There's no way to tell. There's no way to tell where the bottom of the barrel is - logically - the western supplies have to be getting short," said Holter of the gold supply. And while he's bearish on all currencies, Holter is especially negative on the U.S. dollar, which he believes will lose out to the Canadian dollar as the latter is part of a resource-based economy.