3 Reasons Why the Gold Price Will Shine in 2020

3 Reasons Why the Gold Price Will Shine in 2020 Author: Sebastian Bowen @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.

From all the talk of a global pandemic disease, you would expect the price of gold to be shooting the moon. Gold is supposed to be the ultimate safe haven asset, after all.

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.

Gold and Dow Jones. | Chart: kitco.com

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.

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Rory Hall, The Daily Coin and Gospel News Network. Beginning in 1987 Rory has written over 1,400 articles and produced more than 500 videos on topics ranging from the precious metals market, economic and monetary policies, preparedness as well as geopolitical events. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver, Gold Seek, SGTReport, and a great many more. Rory was a producer and daily contributor at SGTReport between 2012 and 2014. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Dr. Warren Coates and Peter Schiff, to name but a few. Don't forget to visit The Daily Coin and Gospel News Network to enjoy some of the best economic, precious metals, geopolitical and preparedness news from around the world.