Instability is currently rampant throughout global financial markets. The Brexit decision has shaken up the financial world as it single-handedly ended a long period of stability in the United Kingdom’s banking sector while the country’s stock market and currency continue to be fragile. Central banks across the world are under fire for distorting markets and mismanaging financial crises. Bonds – traditionally seen as one of the safest investment vehicles – have been yielding record lows while the bond market has likely been subject to bank manipulations. It’s a frightening time for investors, but there are pockets of opportunity, particularly among tangible assets such as gold.
Gold in the Summer of 2016
In the midst of a tumultuous economic environment marked by falling bonds and stock-based insecurity, it can be difficult for investors to see silver linings. While there is definite cause for concern during this time of instability, there are also areas of significant opportunity. The gold market has long performed quite well in times of uncertainty — and this has certainly been the case following this summer’s landmark Brexit vote. Shortly after Brexit, gold prices reached a two-year high. However, Brexit is not the only factor destabilizing international markets. Aside from the various global issues mentioned earlier, here in the U.S., fears of deflation and policy uncertainty still plague the economy as the Fed continues to postpone an interest rate hike and the U.S. dollar is slipping in response. This lack of confidence in the U.S. economy’s strength indicates that a promising gold season is ahead for savvy investors.
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Gold Prices Haven’t Peaked
While a few skeptics assume that gold prices will settle in once the shock of the Brexit decision subsides, experts predict further price jumps as additional crises in the Eurozone and beyond are only set to worsen. Political turmoil is rampant throughout Europe and across the globe, and there is little indication of the current tension subsiding in the near future. These crises are further exacerbated by sluggish economic growth worldwide and financial institutions inability to address this problem effectively. People’s eroding trust in political and financial institutions around the world may likely drive the demand for safe, tangible assets like gold. Thus, as 2016 draws to a close, investors can expect to see gold’s price continue to go up. In fact, some experts believe that gold can rise to $1,400 in the near term and even $4,200 in the long run. While short-term increases in gold prices are to be expected, these hikes will likely hold steady in months and years to come. The price of gold has not peaked and arguably won’t do so for some time, so investors who get in on the market sooner than later could potentially see their portfolios triple in value.
With gold prices expected to rise over the coming months, now is an excellent time to invest. Global economic uncertainty and political disarray are bound to continue, but if you’re equipped with a diversified portfolio that includes gold, you can take solace in knowing that you and your loved ones can weather any impending crises.