Analyst Frank Holmes believes that decentralized assets have never been more attractive. They include gold, silver, and Bitcoin, though you could also add artworks to this category.
By calling these assets decentralized, Holmes means that their issuance or creation is not controlled by any centralized body. There isn't any central bank that could decide for more gold or silver to be mined, or for more bitcoins to be mined.
Investors have long been diversifying with precious metals in order to protect themselves from the impact of bad or restrictive monetary and fiscal policies. For instance, between January and September 2022 they bought more American Buffalo and American Eagle gold coins than during any other period since 1999. According to Frank Holmes, this is a sign of Americans' negative outlook on the US economy and its monetary policy.
For the same reasons, investors are showing more interest in Bitcoin, which by its nature is based not on trust but on cryptographic proofs. The idea of trustlessness is fundamental for decentralization. When we use fiat currencies issued by governments, we effectively entrust ourselves to the economic and financial decisions taken by politicians – and those decisions can impact the worth of our fiat money.
Meanwhile, Dennis Gartman (Chairman of Akron University's Investment Committee and former editor of the Gartman Letter) has spoken to Kitco News about the situation in the gold market. He believes that the recent dump to $1,618 has created a good buying opportunity.
According to Gartman, gold is now cheap compared to stocks and almost all other investment assets. It can also start growing again from these levels.
While hedge funds and large investors have been avoiding gold during its summer downtrend, another group of market players profited: central banks. Gartman pointed out that central bankers have been actively buying gold – and this shows where real value lies in the market.
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