Currently, the price of gold is rising because there is a clear need for safe investment, enet. We've seen federal rate cuts and stock market crashes. This has made investors seek to invest their money in safer investments, and gold is one of the best investments of its kind. The weakness of the dollar and inflation are some of the factors that are likely to drive precious metal prices, David Lennox told CNBC's Street Signs Asia on Monday.
Lennox said it looks like everything is ready for the U.S. UU. The dollar will fall, even though it hasn't happened yet. If the greenback weakens, it would be a boon for gold, he added.
Geopolitical tensions between major military powers could also cause gold prices to rise sooner than expected, Lennox said. In particular, Russia's military presence along its border with Ukraine has been accumulating, and that is a central point where it could quickly turn into something disastrous, he said. Do you have any confidential news? We want to hear from you. Get this in your inbox and learn more about our products and services.
It is tempting to think that gold represents an objective and unshakable measure of wealth, especially considering the role of metal as an investment throughout civilization. The value of gold rises and falls like any other investment. While gold will almost certainly never gain or lose its relative value as quickly as penny stocks and dot-com initial public offerings, movements in the price of gold can still convey information. On average, gold covers stock market declines.
Therefore, when stocks fall, gold is likely to rise. It's an ideal hedge, and the timing to build that hedge couldn't be more clear. Of course, gold is also consumed as jewelry, and there are large increases in demand even by world governments, which seek gold as a store of value that they hold in central banks. That said, the price of gold could skyrocket at this important juncture and have lasting movements for gold price predictions for the next 5 years.
This was known as the gold standard, but in 1971, the President of the United States, Richard Nixon, told the Federal Reserve to stop respecting the value of the dollar in gold and ended its primary use as a currency value and helped the asset become more of a store of value. Another consequence of the conflict between Russia and Ukraine, according to Goldman Sachs, will be that not only will Russia not sell its gold reserves, but it will probably return to being a major buyer of gold once the ruble stabilizes. Demand for gold continues to change and, in recent times, has increased as manufacturers of electronic products have seen the use of gold in their products to improve conductivity. Since gold is also considered a very effective portfolio diversifier due to its low to negative correlation with major asset classes, it tends to rebound in times of uncertainty, so one of the factors to consider is the relationship between gold and other asset classes, which feel pressure or pleasure in current financial circumstances.
Investing in gold has never had a better time to start than right now, the price is about to skyrocket, but participating in the trading of such a product can be difficult due to its physical nature and the exclusivity of many gold brokers, who are not as open to new traders. . Gold and inflation also work together, since inflation is a way in which money can devalue quickly, and when this happens, people prefer to keep their money in something that increases in value rather than in something that increases in value, such as gold. In addition, the fact that gold is a scarce asset, but with an uncertain supply, means that it is often worth watching the markets and forecasting gold prices for the next 10 years can often bring positive gains over this long period of time.
To learn more about investing in gold and silver and what could come, especially in the case of fiat currencies, download Mike Maloney's best-selling book, Guide to Investing in Gold %26 Silver. The policy of quantitative easing is in full swing in some of the largest economies in the world and this is good news for gold, since savings are ignored when it comes to the dollar and a new means of saving, such as gold, is needed. For example, India consumes between 800 and 850 tons of gold annually, and rural India accounts for 60 percent of the country's gold consumption. .