Many investors around the world remain on the fence about alternative assets such as precious metals. As the US elections draw near, there is a lot of unease across all markets. So much even that some have already begun panic buying gold, as it tends to retain its value quite well.
Gold Remains Attractive
One could argue there is never a bad time to invest in gold or other precious metals. Unlike fiat currencies, bonds, or stocks, metals tend to retain their value extremely well under any circumstance. There isn’t always a guarantee for profit either, but not losing money is equally important, given the current financial landscape.
With the US elections drawing near, alternative investments note an influx of fresh capital once again. This is evident when looking at gold and silver, yet the trend extends to Bitcoin and other cryptocurrencies as well.
According to some data by Forbes, it seems over 1,000 tonnes of gold have been scooped up by “nervous investors” this year. That is an interesting figure, given everything that has taken place throughout 2020. A lot of investors are scrambling to find something capable of storing value, as well as appreciating in price.
This has proven beneficial to the many gold ETFs found worldwide. The majority of them keeps noting a higher influx of funds for the tenth straight month. Even the recent price dip from nearly $2,300 to $1,850 hasn’t deterred nervous investors all that much.
US Elections, Coronavirus, and Helicopter Money
Several factors contribute to the overall demand for alternative investments such as gold. The upcoming US elections, as mentioned earlier, are only one factor. While they can influence the world’s balance of power, it remains to be seen if they will occur and what the outcome will be. It remains unclear if anyone “wins” regardless of who gets elected.
A second problem, and most people are sick of the term, is the COVID-19 pandemic. All countries are dealing with a second wave, which was to be expected. Albeit initially dismissed by most political leaders. This is a threat that warrants a lot of attention and precautions.
With COVID-19, it is not just about “I’m healthy so I can’t die”. Thousands of people test positive, seemingly recover, and note serious health issues months later. This ranges from short-term forgetfulness to constantly being out of breath and being unable to function in society. These potential consequences should not be taken lightly by any means.
Last but not least, tons of helicopter money has been injected into the global economy. Every country has created money out of thin air to support local businesses, medical staff, and so forth.
While a welcome effort the long-term consequences are always problematic. More inflation seems to be the only possible outcome. That makes investing in gold and other assets retaining their value all the more important.