Gold Beyond 2020


Finally, 2020 is ending. Many will agree that this year was a dreadful year on all counts, except of course for gold-rich investors who witnessed the price of gold going to all-time highs. The news of a vaccine and a push by most countries to return to normal should affect the price and take it down. 

We came from a strong 2019 when it comes to the markets. Anyone who asked the question, should I buy gold bullion got a resounding, yes! The price only took a hit in March 2020 when the global markets were experiencing liquidity issues and interest rates were soaring. Government central and federal banks responded with massive Quantitative Easing, but the fiscal deficits undid the deflationary crunch and forced many risk assets going up. Through it all, gold was well-positioned to ride the wave to new heights.  The pandemic caused a massive short-fall in the supply of gold and people found it harder to buy gold bullion. Analysts knew that at some point the market would self-correct and that process began after August, just after gold hit $2,050. The price began to fall and has been hovering between $1,900 and $1,800. 

Inflation has been incredibly high and when this happens, the value of the US dollar tends to decline. Gold maintains its purchasing power through the market highs and lows. However, like silver, gold can be volatile. Gold had massive spikes in price in 1980, and in 2011. When those spikes ended, gold went back into a bear market that lasted years.

The difference between now and the last spike of 2011 is that money or currency grew quicker than any other year since 1940. This means, there was more money being printed than the amount of gold being produced or traded. The correction that happened in 2011 more or less brought things within a reasonable of value. Still, the economic stimulus packages that are being launched by government keep the increase of broad money supply. In an effort to restart economies, countries that are engaging in quantitative easing (QE) are plunging their countries into a debt cycle that is beyond the GDP growth. So if you are still wondering if you should buy gold bullion Brisbane now, then take you can take your cue from the unsustainability of QE in the long term. 

There is still a lot on uncertainty especially as countries battle the second and even the third wave of COVID-19 infection. As countries like Europe, Asia and others reinstate shutdowns, they can lead to disinflation.  The endgame scenario for gold is not yet clear but speculation sys things will begin to settle later in 2022.

Buy gold bullion Brisbane to diversify. Split investments between stocks and had assets like precious metals. The broader market might start showing reanimation but savvy investors will invest in stocks, in gold, in silver or even in cryptocurrencies. The point many investors make is that it is important to invest in precious or to hedge your wealth in the gold market. Currencies are not reliable but gold is safe and best of all, liquid. You are better off buying gold bullion and storing it under the floorboards of your house than having stacks of dollar bills hidden in your house.