The current economic conditions have prompted a surge in gold prices this year—and many investors are enjoying the ride. After several years of low prices and a bleak outlook, gold is up more than 20 percent so far in 2016. Will gold products continue to surge?
Last week ended with gold trading at $1,245 per ounce—but many investors and experts predict that prices will continue to rise for gold and other precious metals. Some even expect gold to reach highs during the next year or two, with this being the first step. While we may expect there may be some fluctuation around this current level, there are some savvy investors who are bullish and believe that this upswing is just the start. Consider that in 2011, gold prices reached $1,895 per ounce.
If you look at economic conditions across the globe, it makes sense that prices will continue to rise over coming months. With negative interest rates in several important economies, including Europe and Japan, and a push by many to eliminate high-denomination bills and even move toward a digital currency, investors are realizing that their safest bet may not be with traditional savings methods. When interest rates are negative, gold is always an attractive place for investors to hedge their portfolio.
Another factor prompting many to buy gold products and other precious metals is the growing lack of confidence in Central Banks due to rising debt and somewhat desperate looking attempts to boost their economies.
Gold has always been a safe haven against inflation, economic turns and the global factors that can affect the market, from natural disasters to political strife. While sovereign bonds are traditionally considered a safe bet, with interest rates so low, bonds aren’t able to provide investors with the stability or insurance they seek. Gold and precious metals may be the only truly safe place to invest.
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