Experts See Gold Rally Extending
Gold has rallied strongly YTD with recent world events pushing it higher as anxious investors seek its safety and preservation of wealth and buying power.
From Britain’s sudden exit from the EU, to the most contentious Presidential election seasons in US history, to ISIS terrorist attacks, the only thing that is certain now is uncertainty.
What all investors desperately need is certainty, and that is a Key why Gold prices have risen to 1,364 oz YTD and experts predicting Gold to reach 1,500 oz or higher by year’s end.
According to a global research group at Bank of America Merrill Lynch (NYSE:BAC), Gold got a sharp boost in the aftermath of Britain’s shocking Brexit. When markets are unpredictable, investors have historically run to the precious Yellow metal for its strong resistance to stock shocks, retention of value and indifference to inflation.
Bank of America Merrill Lynch offered several reason it feels Gold will extend its rally, including the fact that central banks worldwide are holding or cutting interest rates.
Since investors stand to make nothing from interest-bearing assets, Gold’s intrinsic value shines brighter.
Merrill Lynch also feels continued global QE (quantitative easing) creates concerns about inflation, an erosion of buying power that hammers both currency and USD-denominated paper assets, but which has no effect on Gold’s value.
Further, high Middle East and Asian demand, and a consequent tightening of the market in the West augurs that precious Yellow metal could even rise to 1,900 oz.
Global uncertainty resulting from current unrest is likely to keep interest rates down.
The long-term effects of Brexit are unknown, but it is not going to be pretty.
Uncertainty now surrounds 2 of the world’s reserve currencies, the Great British Pound (GBP) and the Euro (EUR), both not only Key to international trade, but used by millions of consumers daily.
Then there’s the US Presidential election on 8 November
The 1 thing we know for sure is that President Barack Hussein Obama’s term is coming to an end.
The Big Q: Will he be succeeded by unpopular DC insider Hillary Rodham Clinton, or by the outside leader for change, Donald Trump?
The Big A: We will know in less than 100 day, we wait to see.
The US Fed is not likely to hike interest rates anytime soon as the US economic data is weak.
It is Key to create a safe haven strategy, and in today’s atmosphere that means tangible assets like Gold and Silver in investment portfolios.