3 Reasons Why the Gold Price Will Shine in 2020
3 Reasons Why the Gold Price Will Shine in 2020 @SebastianTBowen for CCN News
Gold’s price has had a good start to the year, and there are at least three reasons why the rally could continue.
- Gold’s price still has room to climb after this week’s stock market bloodbath.
- Long-term pressures from the ballooning U.S. budget deficit remain.
- Bernie Sanders’ increasingly tight grip on the Democratic Party nomination is also a potential catalyst.
The U.S. stock market continues to shed value in what is panning out to be the worst week in years. Fears over the coronavirus have pushed the Dow Jones Industrial Average below 27,000 for the first time since October, and we may only be starting to see the full effects.
While we watched the Dow go from 29,500 points to under 27,000 in less than a week, all the gold price has done is hover around $1,650 an ounce – albeit following a fleeting spike towards $1,690.
If the stock market deteriorates any further in the coming days, weeks and months, it’s likely to jerk the inertia and put a rocket under the gold price in the ensuing flight to safety.
Underlying Strengths Remain For Gold
Discounting the very real threats of the coronavirus, two other significant undercurrents of strength remain for gold.
The first is the ongoing disaster that is the U.S. budget. U.S. national debt now stands at approximately $23.39 trillion and is exponentially climbing. Servicing this debt into the future will necessitate either raising taxes and cutting spending, or otherwise debasing the U.S. dollar as a currency.