Gold prices have been surging since late 2018 and have climbed nearly 35% in 2020. This unprecedented surge is causing a slew of investor interest in gold as the U.S. economy remains unstable. The U.S. economy shrank by a stunning 9.5% from April through June, marking the fastest quarterly drop in modern record-keeping.
Here are four reasons why gold prices are exploding:
Sense of stability
Gold is insulated from inflation and uncertainty. It is relatively stable over time, and its value isn’t easily depreciated by outside factors or currencies.
Weakened dollar
The dollar has depreciated and gold is cheaper in other currencies.
Low yields
Current Federal Reserve policies have weakened the bond market and brought down yields, making gold more attractive to investors.
Fanfare
Increased media attention leads to more investor interest, and some analysts expect prices to continue to rise.
Last month, Phillip Streible, an analyst with Blue Line Futures predicted gold would hit $2,500 by December 2021. Other market watchers believe it could happen as early as next week or by year’s end.
Predicting the future
Physical stockpiles of gold have exploded, and there is reason to believe that gold prices will continue to rise.
ABC stated that today’s economic and market conditions create a perfect storm for soaring gold prices. But the article also added a note of caution by one expert: People want to find some sort of insurance in a financial crisis and own a safe asset. But there just aren’t safe assets in a financial crisis.
While this is a lot of information for someone looking to unload an old trinket, this just might be the Black Swan episode people have been waiting for to cash in. We would be happy to provide you with a valuation on any gold pieces you may wish to liquidate. Visit our gallery or give us a call for a complimentary consultation.