Investors concerned about the sheer volume of risk they face thanks to a tumultuous global environment are urged to buy gold.
The international geopolitical stage and economic market conditions remaining hugely challenging and subject to a vast amount of uncertainty, creating a great deal of risk for today’s investors.
MarketVector Indexes’ Joy Yang, who is the global head of index product management, says this is a classic case of investors needing to reduce their exposure by buying gold to hedge against market turmoil. What’s more, it’s imperative that gold buying happens quickly, with all of the factors to reignite a strong rally still in play.”
“If you look at the drivers for this gold rally, central bank demand, geopolitical uncertainty, inflation fears and slowing growth, they haven’t gone away,” Yang says. “The floor in gold is definitely shifting upwards because there are more factors that are supporting the price.”
Longer term, the stage is also set for gold to continue to thrive thanks to recent monetary policy and concerns around the stability of the banking system, making gold a solid safe play bet.
She added, “We are just starting to see the potential fragility that comes with the end of years of access to easy money. This shift from easing to aggressive tightening comes with tighter credit issues and will become a new macro driver for gold prices. Investors are starting to understand that if the Fed keeps increasing rates, there may be wider economic contagion. So, there’s still a lot of safe-haven support for gold.”
Whatever the Federal Reserve may decide to do next, any change in policy is likely to favour support for gold longer term and lead the precious metal to higher price levels. “Inflation monster that won’t easily go away and there is a risk that we could have both an economic crisis and inflation. That will be a strong environment for gold,” Yang concludes.
Don’t delay. Buy gold today.
