If there is anything that 2020 has taught us or woken us up to, it’s that we are always on the brink of some disaster and that it is important to plan for the future that is still unknown.
Gold investors have been watching gold soar over the past 5 years and one thing that the precious metal proved to be true: it is a safe haven in uncertain times. The 2008 financial crisis should have taught us something but it burst one bubble and shifted the focus to that one thing – growing the economy. In the meantime, a lot of problems were bubbling underneath. The European Union showed signs of buckling when Britain started earnestly campaigning for an exit. Teresa May stepped down under the darkening cloud of Brexit and Boris Johnson promulgated his campaign for “freedom” from the European Union from his pink bus. Everyone thought it was a joke, but a few weeks later he had become the British prime minister. On the other side of the pond, The United States had elected a president who seemed inept and unable to grasp the idea of democracy the U.S President would go on to try a woo North Korean President Jim Jon Ung, to test the wrath of the Chinese with his trade war. He pretty much got on most people’s bad sides. If he wasn’t sidling with dictators and people with questionable integrities, he was antagonizing other governments, countries, and other important global institutions like NATO. All this contributed to the rally of the gold price and has kept gold dealers very busy.
President Trump might now be old news and we are less panicked about COVID-19 now that there are vaccines and people are being inoculated but looking back, the slightest mention of setting crazy that Trump had tweeted did have an impact on the markets.
We know that the new U.S president, Joe Biden supports renewable energy. His election into the white house has brought a rise of shares in renewable energy companies and consequently,oil-related companies have experienced a decline in shares this year.
The U.S Federal Reserve hasn’t helped the oil market either. They decided to let inflation to run hot which created more market uncertainty. If it spins out of control for basic necessities like shelter, it could lead to a long-term catastrophe.
Bottom line:
The combination of politics, election uncertainty, changing governments, monetary policies, and inflation can be a boon for precious metal markets like the gold market.
Gold is still a viable hedge against uncertainty.
Normally, rising inflation rates and unclear monetary policies would cause investors to re-evaluate their investment portfolios and diversify into gold and silver but things have not been normal for a while. We are just coming out of the worst pandemic to hit the globe since the Spanish Flu and have gone through radical changes in governments and politics. It’s not just America’s latest election or the growth of right-wing politics. It has been everything, including climate change that has contributed to devastating fires in Australia, floods, mudslides, and earthquakes in places like Japan. It has been a political insurrection in China, Japan, Russia, Belarus, Myanmar. It has been the ongoing war in the middle east, the unending stand-off between North and South Korea. It has been the fledgling economies of African countries and so many other things. With all this going on, you certainly have to hedge your savings and put your money in gold. Find gold dealers near you who can help you navigate the process of acquiring gold to protect your future.