Gold, Silver Hit Record Prices as Economic Fears Mount

Gold and silver both hit record high prices recently as fear continues to drive the economy. Ever since the government shutdown began at the beginning of the fiscal year, gold and silver prices have shot up, with no signs of looking back.

What many gold and silver owners, and gold and silver buyers, want to know is how far these prices may continue to rise. Are we seeing signs that precious metals are overbought and are ripe for profit-taking, or are we in the midst of another bull run like 2007 to 2011, when gold rose 297% and silver rose 369%?

Here are three reasons gold prices could continue to rise.

1. US Government Fiscal Policy

No matter how the government shutdown is resolved, the threat of future shutdowns remains. That helps to sow fear in markets that the next time a shutdown is threatened, it won’t be solved quickly either.

Contributing to this mess is the fact that the US government continues to run up massive deficits, with the national debt now approaching $38 trillion. With Democrats pushing for even more spending in order to stop the shutdown, the reality of the government’s spending crisis is becoming more apparent to many people.

How much longer will the federal government be able to run multi-trillion dollar deficits before markets finally rebel and start moving away from Treasury debt as a safe haven asset? With interest on the national debt now reaching over $1.2 trillion a year, how much longer will Congress remain oblivious to the debt crisis that is threatening this country?

Between fiscal mismanagement and shutdowns, confidence in Washington’s ability to control its spending behavior is eroding. And if trust in Washington erodes, more and more people could start placing their trust in safe haven assets like gold and silver.

2. Continued Tariff and Trade War Threat

Just when you thought the tariff threat was over, President Trump announced a new set of tariffs on Chinese imports starting on November 1st. That immediately brought a threat of retaliation from China.

Markets had already experienced numerous previous disruptions from tariff changes, and this latest threat sent markets into a tailspin, wiping out $2 trillion from markets in a single day. That underscored just how much markets fear the eruption of a trade war.

These fears aren’t limited to the US either, as the Netherlands just took control of a Chinese-owned semiconductor company, citing the need to provide a supply of critical goods in an emergency, and sending shares of the company plummeting.

Tariff and trade disputes are just as much a threat as they were six months ago, and if markets get even more fearful there’s a good chance that silver and gold could benefit.

3. Fear of Economic Slowdown

Everywhere you look, it seems that there are more and more signs of an economic slowdown. The labor market remains weak, inflation is problematic, and numerous economic indicators point to an economy that seems to be on the downswing.

Recessions only are declared after they occur, so there’s no way to tell conclusively right now if the US economy is in recession, but if it isn’t, could it be on the way?

Uncertainty certainly seems high among market participants, and given what we’ve experienced this year, there’s no telling what could still be coming down the pike. If fear and uncertainty take root, it could continue to push gold and silver prices ever higher.

How Much Higher are Gold and Silver Prices Heading?

Societe Generale now believes that a $5,000 gold price is “increasingly inevitable” by the end of next year. Helping to contribute to that price growth is continued strong demand from gold exchange-traded funds, which are seeing significantly higher gold inflows compared to the same period last year.

Analysts noted that the most recent indicators of fear and uncertainty aren’t even taking into account the latest dustup between Trump and China, so that market fear may actually be underreported right now. And according to those same analysts, the upside risk to gold is now greater than the downside risk, meaning that they judge there to be a greater potential for gains than for losses in the gold market over the coming year.

Silver prices have blown away their previous all-time highs, and at one point pushed above $52 an ounce, an increase of 82% this year. This has been helped by a short squeeze in London that is in part driven by a concern over low physical silver inventories in London, with the result that silver bars are now being flown to London to fulfill demand.

How much longer this short squeeze will last is anyone’s guess, but in the meantime those who own silver or who are looking to sell silver are probably pretty happy at seeing silver smash into record high price territory.

Put Precious Metals to Work in Your Portfolio

With so much safe haven buying recently, it seems that the bull run that gold and silver are experiencing could remain strong. Now is the time to start thinking about how gold and silver could play a role in your asset portfolio.

Do you remember the 2008 financial crisis, when markets fell over 50% from their all-time highs? Do you remember how gold gained 25% during that same time period? And do you remember how gold and silver increased 266% and 542% respectively from 2008 to 2011?

There were probably many people back then who saw silver and gold prices rising and wished that they had bought silver and gold when they were still cheap. And there are probably many people today who wish they had bought gold and silver earlier this year before this bull run.

But if you’re one of those people, it’s not too late to buy gold and silver. Gold and silver could very well be at the beginning of another amazing bull run, and even at record high prices today they could still have a lot of room to run.

If you want to add gold and silver to your portfolio, the precious metals specialists at Goldco can help you do that. Whether you want to make a direct cash purchase of precious metals or start a gold IRA or silver IRA to use tax-advantaged assets to purchase precious metals, Goldco has helped thousands of Americans benefit from purchasing gold and silver.

So don’t think that you’ve missed out on your opportunity to buy gold and silver. Call Goldco today to start putting precious metals to work for you.