SGOL

It's monetary inflation (i.e., money supply growth) that determines gold's value, not price inflation.Gold would need to increase to ~$2,400 to get back in line with M2.The U.S. will continue to fund these deficits with more debt and debt monetization. This will result in the rate of M2 growth remaining far higher than historical norms.Physical gold and gold mining stocks remain one of the best options for investors that want portfolio protection from the monetary inflation that is occurring now and that will occur in the future.

SGOL is a strong alternative to other ETFs in that it has a very low expense ratio while maintaining physical holdings of gold.Prior to investing in SGOL, we need to formulate an outlook on gold prices.Gold prices, and therefore SGOL, are likely to rally over the coming year due to the elevated fear levels seen in the equities markets.

Gold has been suppressed by a rally in 10-year Treasury yields.The dollar is still in the driver's seat for gold, however.I expect the dollar to weaken once the next U.S. stimulus is announced.A falling dollar will strengthen gold's price, pushing it above $2,100.

The election cycle and exploding Fed balance sheet will help push gold up.On a number of metrics, gold remains cheap.In the very near term, gold will be pressured until catalysts emerge.  But then it promises to head much, much higher.

Western policymakers embark increasingly on centrally planned economic policies.Aggregate debt levels and central bank balance sheets inflate continually and not countercyclically.The monetary policy adopted by the Fed and ECB proved already ineffective in Japan.Gold is likely to continue its short-term rally before technicals weaken.

In the long run, the constant rise in liquidity injected by central banks to assist the restrictive economies will support assets with limited supply, such as gold and silver.However, the rise in uncertainty over the US elections and new rounds of lockdowns to fight the pandemic will increase demand for safe assets such as the USD.A stronger USD may weigh on both gold and silver in the short run, which have already started to show some signs of fatigue.

Silver in percentage terms will outperform gold in this precious metal bull market.Investors are in an acquisitive mood as the demand for physical silver takes off.Demand via the silver-backed exchange-traded products (ETPs) has just about tripled in the first nine months of this year.Avoid the day to day and even the week to week oscillations in the silver market as this is no more than a distraction from the emerging bull market in the precious metals space.

Many of the biggest quant strategies in the stock market these days are plagued by doubt and debate. In fixed income, they just got a $25 trillion endorsement.