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Global Experts See Gold Rising to $1,500 or More

Global Experts See Gold Rising to $1,500 or More

(Dollar Photo Club)

By Wednesday, 03 August 2016 07:35 AM Current | Bio | Archive

Gold has been on an interesting roller coaster ride in the past year, with recent world events pushing it higher as anxious investors seek its safety and preservation of buying power.

From Britain’s sudden exit from the European Union, to one of the most charged presidential election seasons in U.S. history, to ongoing terrorist attacks, the only thing that’s certain these days is, well, uncertainty.

But what big and small investors desperately need is certainty, which is one of the reasons recent gold prices have hovering around $1,350 an ounce — with one corporate and investment banking giant predicting gold to reach $1,500 by year’s end.

According to a global research group at Bank of America Merrill Lynch, gold got a sharp boost in the aftermath of Britain’s shocking Brexit. When markets are unpredictable, investors have historically run to the precious metal for its imperviousness to stock shocks, retention of value and indifference to inflation.

Warren Buffett is famous, some would say notorious, for clubbing gold by saying it “just sits there.” But it’s that very steadfastness and, crucially, that preservation of buying power that investors are running to. And let’s face it; small investors are more afraid of losses than Mr. Buffett has to be. When investing is essentially a game of strategy you can afford high-risk bets. But for most investors their portfolio, their savings, and their retirement are all they have.

Bank of America Merrill Lynch proffered several reason it feels gold will soar, 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.

The banking giant also feels continued global quantitative easing also creates concerns about inflation, an erosion of buying power that hammers both currency and dollar-denominated paper assets, but which has no effect on gold’s value.

Another expert, Barry Dawes of Paradigm Securities, citing high Asian demand, and a consequent tightening of the market in the West, says he thinks the precious metal could even rise to $1,900 an ounce.

So what’s the bottom line for you, the middle-aged American struggling to put enough away for retirement, and seeing virtually no good economic news on the horizon?

The global uncertainty resulting from current unrest is likely to keep interest rates down. The long-term effects of Brexit are still unknown, but as anyone who has ever been through a divorce can tell you, it’s not going to be pretty. Uncertainty now surrounds two of the world’s reserve currencies, the British pound and the euro, both not only key to international trade, but used by millions of consumers every day.

Then there’s the U.S. presidential election. The only thing we know for sure is that President Obama’s term is coming to an end. But will he be succeeded by unpopular Washington insider Hillary Clinton, or by controversial and volatile billionaire outsider Donald Trump? With polls changing weekly it’s hard to predict.

The Fed blinked again last week on interest rates, and as Election Day draws closer it’s unlikely to risk a hike anytime soon. Since our election’s outcome will surely have a ripple effect around the world, the reality check is that we may not see a bump for many, many months.

If you’re under 40 you can afford to take a long view of all this madness. But if you have savings you’re relying on for a retirement that could last thirty years or more, creating a safe haven strategy, like a stockpile of tangible assets, or a tax-deferred gold IRA to shield them is crucial. 

Trevor Gerszt is America's Gold IRA Expert, CEO of Goldco Precious Metals, and holds a position on the Los Angeles board of the Better Business Bureau. To read more of his work, Go Here Now.

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Gold has been on an interesting roller coaster ride in the past year, with recent world events pushing it higher as anxious investors seek its safety and preservation of buying power.
gold, price, global experts, value
Wednesday, 03 August 2016 07:35 AM
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