Goldman Sachs analysts recently shared their outlook on the gold market. Forecasting a bullish gold trend is remarkable, but necessary given the current circumstances.
While it is true that COVID-19 has created havoc among economies worldwide, there have to be better solutions than printing money out of thin air.
During times of uncertainty, precious metals tend to become more popular, and by default, rise in value. This is especially visible when looking at the prices of both gold and silver.
One thing that is certain is how the pandemic has been beneficial to precious metal markets. Gold’s price has bounced back strongly after dropping to the low $1,260 range.
It is the first time in history that so much “extra money” is brought into circulation in quick succession. No one knows what the consequences will be.
This is already becoming apparent across nations that seemingly thwarted the coronavirus outbreak. South Korea and China deal with a rise in overall infections,
The bigger question is whether or not banks are even in a position to consider the selling of such assets, given their current balance sheets.
Gold is also a physical commodity, thus it cannot be printed in unlimited quantities like fiat currency. There is no such thing as a “gold printer”.
he Bank of Japan is introducing additional stimulus packages to soften the blow of the economic impact that will follow after the coronavirus crisis has been overcome.
In total, there are just four assets with a positive performance over the past year, which isn’t exactly promising. It is an unfortunate side effect of the coronavirus crisis.
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