Gold Price Rises as Economy Continues to Weaken
Just because stock markets have yet to price in the weakening US economy doesn’t mean that all investors are in the dark about what’s going on. And that’s why the gold price continues to rise, as the investors who understand what’s going on are leaving stocks and jumping into gold. That’s fueling continued strength in gold that should sustain high price levels for the rest of this year and well into the coming years.
Many gold investors realize that the economic recovery that so many are hoping for isn’t going to materialize. So many people have been put out of work in such a short amount of time that it’s going to take a long while for things to get back to normal. For one thing, even those states that are opening up are placing strict social distancing provisions on businesses, ensuring that even if people wanted to start shopping and eating out again, they won’t be able to do so like they were before. So with businesses slow to open, it’s going to take many months before all those unemployed people are able to make it back to work. Even then, with some making more money on unemployment insurance than they were at their jobs, many businesses may find it hard to get their employees back.
Then there’s the fact that even with the economy opening back up, it was set to fall into recession anyway. With huge amounts of debt still outstanding, numerous corporations getting downgraded, and many companies having to file for bankruptcy, no one really knows who will be left standing once things open up again.
The COVID-19 crisis has also led to a deterioration of relations with China, as Western anger at what has now been seen as China’s deliberate attempt to mislead about the nature and seriousness of COVID-19 has led to accusations flying from all sides. There’s every indication that China won’t live up to the terms of the Phase One trade deal it signed with President Trump in January, in which case the US-China trade war will probably kick back in even worse than before.
In short, there’s really not a lot of reason for optimism in the economy today, which is why so many investors are flocking to gold. They learned their lesson from 2008, after seeing stock markets losing more than 50% of their value while gold tripled and silver quadrupled, and vowed not to make the same mistakes again. Due to developments since 2008, it’s even easier to invest in gold than ever.
With a gold IRA, investors can benefit from the same advantages they would receive from any other IRA account, while enjoying the protective abilities that only gold can offer. They can even roll over existing retirement assets from 401(k), 403(b), TSP, and similar retirement accounts into a gold IRA without tax consequences. That enables investors to lock in any gains they still have made from stock markets, while safeguarding their assets in precious metals investments and protecting their wealth from the rocky road that lies ahead.