Central banks rarely have anything good to say about gold, but then again, a poker player with the “nuts” would be foolish to advertise. However, analysts from around the world are beginning to sing in harmony about the protective benefits of gold, particularly when global and domestic economic conditions are converging and increasing the potential for cataclysmic responses on a variety of fronts. To begin with, many analysts are in agreement that growing debt presents an inflation risk, such that central banks will probably respond by continuing to buy gold, at least as long as the U.S. share of global GDP continues to decline.
There are many reasons for the increasing price of gold, not the least of which would include rising inflation, trade tensions, and a slowing global economy. According to a recent report from the Washington-based Institute of International Finance, world debt is racing to the forefront of concerns, as it hovers near a new record at $244 trillion, more than three times the size of the total current global economy. Analysts have noted that the gold market is seeing two important measures not seen since World War II. Not only is global debt near a record high, but global central banks are purchasing gold at levels never before seen.
International research firm Bernstein issued a warning recently, stating that growing global debt and ongoing geopolitical uncertainty have set the stage for financial markets to enter a period where neither stocks nor bonds will perform well, typically making gold an attractive asset. In addition, although gold prices have been slow to find new momentum, analysts have noted that increasing market volatility and global uncertainty combined to push gold prices above the critical psychological level of $1,300 per ounce.
Last weekend, Nobel Prize-winning economist Paul Krugman announced his belief that there is a significant chance that the world falls into a recession this year. Talk of trade wars, Middle-East conventional wars, and a slowing global economy should provide investors with all the concern necessary to cause them to insure assets and shore up a legacy with the unmatched protection of gold. Whether considering a purchase to be held at home, in a vault, or at a bank, the experts at American Bullion stand ready to assist. As pioneers in the Gold IRA Industry, American Bullion created a process that makes creating, transferring, or rolling over a qualified plan into a Gold IRA, a simple, quick and tax-free event. Call American Bullion now, at (800) 653-GOLD (4653), for professional assistance, with award-winning customer service.
Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.