After breaking through $1,300 an ounce on the last trading day of 2017, gold started the new year hovering between $1,310 and $1,320 an ounce (see chart).
Meanwhile, bitcoin and other cryptocurrencies continue to burst on the financial scene, presenting a potential alternative in some investors’ minds to gold. “Mad Money” host Jim Cramer and technician Carley Garner evaluated how cryptocurrencies could affect gold—and whether, in fact, they could replace gold—in a recent CNBC article.
The article notes that “digital currency…isn’t backed by anything physical. … A bitcoin owner being hacked or forgetting his password would garner the same result. … Gold, on the other hand, has some inherent value. … The $2.4 trillion global gold market is very deep. Millions of investors own a piece of the pie in the form of bullions, jewelry, coins or other investments.”
“‘Long story short,’” says Cramer, “‘bitcoin’s not going to replace gold anytime soon.’”
Rick Andrews is president of Avant Capital Management