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Forbes.com: 3 Reasons Gold Price Will Continue to Surge

Forbes.com: 3 Reasons Gold Price Will Continue to Surge
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By    |   Friday, 20 September 2019 11:14 AM

The price of gold seemingly will continue to keep rising on a daily basis because of a trio of factors that only stand to boost the precious-metal's value amid such uncertain times, Forbes.com reports.

"I see a lot happening at the moment—from an unprecedented $17 trillion in negative-yielding bonds worldwide to heightened geopolitical threats—that might boost investors’ appetite for the metal, which has a history of holding its value in times of crisis," writes Great Speculations Contributor Frank Holmes.

He listed three reasons why he believes there’s further upside to gold prices, and how you can participate.

1] Rising Inflation. "In the past, faster inflation has been constructive for gold prices. That’s because inflation, by its nature, destroys your purchasing power, and to limit these losses, investors have traditionally turned to the yellow metal as well as gold mining stocks. So if you believe inflation is prepared to surge even more, it might make sense to add gold to your portfolio," the report said.

2] Negative US Yields? “As much as $17 trillion in debt around the world right now trades at a negative yield. This has recently pushed the price of gold to new all-time highs in a number of currencies, including the British pound, Japanese yen and Canadian and Australian dollars," he said. "And if you’re doubtful that negative yields could possibly occur in the U.S., consider the recent words of one Alan Greenspan, former Fed chairman: 'There is no barrier for U.S. Treasury yields going below zero. Zero has no meaning, besides being a certain level.' If you believe U.S. yields could soon break below this “barrier,” then gold might be a prudent investment decision."

3] Investors Seek Safe Haven Amid Uncertainty. "There are a number of geopolitical and economic risks right now that have triggered gold’s “fear trade.” Economic growth is slowing worldwide as a result of trade tensions. Global factories, as measured by the JPMorgan Global Manufacturing PMI, have been in contraction mode for two straight months as of August. Such concerns also help explain why global central banks have been net buyers of the yellow metal since 2010," he concluded/

To be sure, investment guru Mark Mobius is bullish on gold as central banks around the world cut interest rates.

“Physical gold is the way to go, in my view, because of the incredible increase in money supply,” said Mobius, the founding partner of Mobius Capital Partners.

“All the central banks are trying to get interest rates down, they are pumping money into the system. Then, you have all of the cryptocurrencies coming in, so nobody really knows how much currency is out there,” Mobius recently told CNBC.

Investors should allocate about 10% of their assets in physical gold, Mobius, who manages about $4 billion in assets, told the Reuters Global Markets Forum. Mobius recommends that the rest be invested in dividend yielding equities. That’s especially if the dollar gets weaker.

“The U.S. government, the Trump White House, does not want a strong dollar,” Mobius said.

“They are certainly going to try to weaken the dollar against other currencies and of course, it’s a race to the bottom. Because, as soon as they do that, other currencies will also weaken,” said Mobius.

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The price of gold seemingly will continue to keep rising on a daily basis because of a trio of factors that only stand to boost the precious-metal's value amid such uncertain times, Forbes.com reports.
forbes, gold, price, soar, surge
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2019-14-20
Friday, 20 September 2019 11:14 AM
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