Tags: gold | demand | uk | china | etf | diversify | portfolio

4 Reasons to Be Bullish About Gold

4 Reasons to Be Bullish About Gold
(eamesbot / 123RF Stock Photo)

By    |   Thursday, 13 June 2024 04:47 PM EDT

The gold price has been climbing all year, with recent all-time highs set last month of over $2,400 per ounce. While there has been some recent pullback due to profit-taking, the underlying conditions favoring a continued increase in the gold price are still there.

Inflation remains elevated, above 3%, and doesn’t show signs of falling below 3% anytime soon. The Fed remains steady on interest rates, with no clear case for rate cuts.

Fears of recession remain, as the labor market is slowly weakening. And to millions of Americans still struggling to make ends meet, their financial conditions are stagnating or deteriorating.

But if all of this wasn’t enough to remain bullish on gold, here are four more reasons that indicate even more potential gains for gold in the future.

1. UK Investors Looking to Gold as Safe Haven

The UK is facing an upcoming election in which the ruling Conservative Party could end up getting thrown out on its ear. Rishi Sunak’s deeply unpopular government could end up getting thrashed at the polls, and might not even be the second-place vote getter.

Many Britons are uncomfortable about the uncertainty of what appears to be a near-certain Labour win, with the possibility of higher taxes and more regulations. Perhaps as a result, the UK’s Royal Mint is seeing an explosion of interest in gold.

Gold sales at the Royal Mint have skyrocketed ever since the election date was set for July 4, with sales more than doubling from previous figures. And many of those buyers were first-time buyers, looking for safe havens amid political and economic uncertainty.

With the US elections coming up in November, could we see similar increases in the months leading up to the election? A lot of potential demand could be unleashed before November, depending on how polling numbers look.

2. Gold ETF Demand Growing

While gold exchange-traded funds (ETFs) may have their drawbacks, they nonetheless remain a popular investment product for those who want exposure to gold without having to actually buy gold. This year has seen huge inflows into gold ETFs, as the gold bull run has spurred additional investment demand.

While gold ETFs may be easy to invest in, it’s important to remember that buying shares in a gold ETF doesn't actually mean that you’re buying gold. You’re just buying shares in a fund that claims to own gold.

Those ETF shares can’t be converted to gold, and you have to trust that the fund actually owns and controls the gold it claims to own, as the custodial arrangements surrounding gold ETFs are often quite opaque.

But while gold ETFs may have some disadvantages to physical gold ownership such as owning gold through a gold IRA, they are still popular with many investors, and interest in gold ETFs can sometimes be a proxy for overall investment sentiment towards gold.

3. Stronger Chinese Gold Demand

China continues to be a major player in the gold market. Whether it’s the Chinese central bank continuing to buy gold, or Chinese investors plowing money into gold, China is increasingly becoming a driver of world gold markets.

In the first three months of this year, Chinese investors increased their gold purchases by over 34% over the same time period last year. In fact, gold has become so popular in China that investors are increasingly having to face the prospect of gold scams.

With many Chinese investors having given up on the real estate market, they’re looking to gold to provide themselves with price growth and economic stability and security. But that has led scammers to enter the market as well, tricking unsuspecting investors into buying fake gold.

It can be helpful to familiarize yourself with how gold scammers operate, so that you don’t run the risk of falling victim to a gold scam. And that’s also why it can be important to work with trusted partners who guarantee the authenticity of their gold.

At Goldco we work directly with mints around the world to source our gold coins, bringing you 100% authentic gold coins directly from the mints that produce them.

4. Gold Analysts Remain Bullish

Many gold analysts are similarly bullish on gold, expecting further growth in the gold price this year. Analysts at UBS, for instance, think that gold should be bought on dips when the gold price hits $2,250 to $2,300 an ounce.

We’re nearing that territory right now, as continued profit-taking has kept gold trading at or below $2.350 an ounce for a while. But if economic conditions begin to deteriorate later in the year, the gold price could start rising again.

UBS specifically pointed out central bank gold buying as a key support for the gold price, something that has helped buoy gold in recent years. Between central banks continuing to buy gold and investors looking to buy gold as a safe haven asset, there should be plenty of continued gold demand to keep the gold price high.

How Bullish Are You Towards Gold?

If you’re looking for safe haven assets to help protect your financial well-being during an economic downturn, you can certainly do worse than gold. Gold has served as a safe haven asset and a store of value for centuries.

Gold’s performance during periods of sustained high inflation, such as during the stagflation of the 1970s, and its performance during recessions, such as during the 2008 financial crisis, have helped solidify gold’s reputation as a safe haven.

Many Americans have already taken steps to protect themselves with gold, whether it’s through tax-free rollovers of 401(k) assets into a gold IRA or through direct cash purchases of gold shipped directly to their doors.

If you’re worried about continued high inflation, about the threat of recession, and if you fear how much you might lose during a stock market crash and economic downturn, maybe it’s time to start thinking about gold.

Call the experts at Goldco today to learn more about how owning gold can help you safeguard your financial future.


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Trevor Gerszt is the founder and CEO of Goldco, a precious metals dealer in Los Angeles. For more than 20 years, Trevor has sought out ways to help people build long-term wealth through the security and stability of precious metals and other alternative assets. Goldco is A+ Rated by the Better Business Bureau, a 5-Time INC 500 Winner and has countless 5-Star Reviews for its quality customer service, dependability and strong reputation.

© 2024 Newsmax Finance. All rights reserved.


TrevorGerszt
The gold price has been climbing all year, with recent all-time highs set last month of over $2,400 per ounce. While there has been some recent pullback due to profit-taking, the underlying conditions favoring a continued increase in the gold price are still there.
gold, demand, uk, china, etf, diversify, portfolio, retirement
1076
2024-47-13
Thursday, 13 June 2024 04:47 PM
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