– Nigel Doolin, Head of Trading at Core Bullion Traders.
As gold continues to hit all time highs (at time of writing) investors and market commentators worldwide are all agreeing on one thing: it appears that the ‘perfect storm’ is building for this safe-haven asset. Last year (2019) gold performed up by 18.5% – that’s a great return on investment by any standards.
Most savvy investors will know, historically the price of gold rises in times of political and economic unease. With Geo-political tensions currently rising throughout the world due to the US-China Trade war, Brexit and Russia’s ever-increasingly inward’s facing attitude, investors seem to be running to the safe-haven asset of gold.
Let’s not forget the Covid-19 worldwide outbreak and the catastrophic effects on stocks and shares this has caused, with yesterday’s trading earning the moniker: ‘Black Monday’.
Bloomberg Intelligence senior commodity strategist Mike McGlone wrote in his March update: “Resumed Federal Reserve easing, negative real yields and recovering stock-market volatility are primary factors to sustain gold’s upward trajectory,”
When a market analyst such as McGlone foresees a continued upward direction of the market for gold, people take notice. It is easy to see how the smart investor is flocking to the precious metal. This uncertainty of course, supports physical demand for gold, the most regular advice being to buy and own PHYSICAL metals.
The Gold Hedge
The simple fact is in times of turmoil gold tends to go upwards in price. The past has shown that gold is a great hedge, when stocks & shares markets are falling your gold should then be performing well…this is the very essence of a good financial hedge.
Right now, the Bulls are marching and smart investors are following suit, putting their money on gold.
As J.P. Morgan once said – “Gold and Silver are Money.…Everything else is Credit.”