If you’ve invested in gold, congratulations. The yellow metal is set to continue its rally in 2020 and keep moving upward. Here are some of the signs:
- Gold is seeing the best returns since 2010.
- The price of gold soared by 15 percent in 2019.
- Gold is breaking over $1,500. Many investors have been waiting for this. Such a round number breaks through psychological resistance.
This year could see record-breaking high gold prices. One of the driving forces behind the rise in gold prices is geopolitical tensions and historic debt levels globally.
China and the United States just signed a ‘phase one’ trade agreement but the future seems to be very uncertain between the two countries. It’s not just trade that is causing tensions between the two countries. The riots in Hong Kong and China’s repressive policy towards it citizens could also spiral out of control.
While the U.S. economy appears strong, there are some weak spots. The demand for durable goods was down by 2 percent in the fourth quarter. Consumer spending, on the other hand, is seeing a free-for-all high with debt spinning out of control. Neither bodes well for the U.S. economy.
The Federal Reserve is making borrowing easier, pushing more and more consumers and businesses into debt. If this trend continues – and it will in all likelihood – the resultant recession with drive the price of gold even higher.
China isn’t the only country posing a trade uncertainty. Several Mideastern countries, Iran, Malaysian, Turkey, and Qatar, are looking to use gold instead of dollars in future trades. Russia has been busy dumping Treasury debts and limiting its trades in U.S. currency, thus weakening the U.S. dollar. Russia has been increasing its gold holdings, as well, up to $548 million.
The U.S. dollar is currently the world’s reserve currency. If it’s reserve currency status gets called into question the price of gold could see an almost limitless rise.
For anyone seeking some financial security in economically uncertain times, the price of gold is looking to be on the rise for quite some time to come.
