A lot of analysts pegged 2019 to be the best year for gold yet, and it was. Looking back at the precious metal’s performance in the past decade, the last time gold had a good run, or a run as close as the recent one was in 2010. Even with corrections, 2019 was the year for gold’s breakout closing the year on $1,550 an ounce. The latest rise in the price of gold has increased the interest that people have in gold. Those who own gold are realizing how beneficial its liquidity is. You can sell gold for cash to the numerous cash-for-gold buyers that are everywhere these days. You can take your old gold, your broken jewellery, coins or bars to gold buyers Melbourne who will pay you good money for it.
Gold like most commodities goes through seasonal cycles. In the last months of 2019 and going into 2020, gold retained its price momentum. Whether it will be able to keep this up is yet to be seen but judging by the global uncertainties created by the U.S spolitical instability, the recent fires in Australia, the Corona Virus outbreak in China, there is more risk and uncertainty in geopolitics there is more than enough instability in the global economy to elevate the possibility of a further rise in the price of gold this year and beyond.
The connection between global negative-yield debt and the price of gold
According to a recently published report by the World Gold Council, gold has had a sturdy performance because it is what investors who are looking for safe haven investments turn to in the face of economic uncertainty. The global economic uncertainty has left a lot of investors fearful. The global cache of government issued bonds trading at negative rate has gone to new heights.According to the Deutsche Bank, about 25% of the government bonds worldwide are trading at negative yields, that is about $15 trillion government bonds. This number actually tripled in 2019, making more investors fearful of what would happen to their stock. Furthermore, the WGC states that the low bond returns have favored additional exposure for diversified investment portfolios. The growth in gold investors shows that the world has less confident in fiat currencies and savvy investors are turning to the precious metals industry putting their money into metals like gold.
The link between the growth in the supply of money and the price of gold
Analysts have taken notice of how gold has been following the supply of money since 1970. The supply of money or fiat currencies has dramatically surged over the last decade but gold is moving along with it. Inflationary policies by central banks and the growth of the amount of currency being printed – hurts the economy and weakens the buying power of said currency. As long as inflationary policies are being followed, a savvy investor will benefit greatly by keeping gold as a means of liquidity. Gold retains its purchasing power regardless of the inflation that central banks caused by printing more paper money. If you own gold, you can be sure of a good return when you sell to gold buyers Melbourne.