U.S. Equities and the U.S. Dollar Weigh Heavily on Gold Pricing: Is It the Right to Buy Gold?
Jitters in global equities have created volatility in the global gold market amidst the COVID-19 outbreak. Investors are also concerned about a potential second wave that might hit soon.
It’s important to note that the unstable economy has also impacted the price and M&A activity of gold as people begin to lose their jobs. In a world where economic inequalities are more prominent than ever, we also see the frequent changes in the value of gold.
The economic crisis that has come in the wake of COVID-19 has weighed heavily on the price of gold. Investors are in a fix regarding whether now is the right time to be investing in gold.
Gold Behaves Weirdly
Gold investments are different from others due to its unique nature. It’s not a currency, nor can it be called a commodity. What do you even use gold for? Most commodities have some utility, including oil, timber, silver, and platinum. What do people do with gold?
The value of gold varies according to global recessions and debt crises. Its demand ebbs and flows according to the people’s views of an impending economic crisis. This makes it more volatile during tough times, such as right now.
The Value Of Gold Is Unpredictable
So, do we advise against or for gold investment?
Buying, purchasing, and trading gold is always the right choice. Its value only appreciates when you cash it in at the right time; the investment will rarely fail you.
But this doesn’t mean that you should convert all your wealth into bars of gold. We recommend that gold should not be more than 10% of your portfolio. The primary purpose of investing in gold is to acquire diversification.
Its value doesn’t take away from the fact that gold is also unpredictable. Its price can move quickly without warning. And with no interests or dividends, gold performs exceptionally well during periods of negative real rates. Investing in gold during an economic crisis might not be a great idea, but holding onto it for when one arrives is.
When investors can’t make money by parking their cash in another investment vehicle, they hold onto the gold for a little while longer. Once the economy starts to stabilize, inflation rises, with central banks hiking up interest rates. This stabilizes the prices of gold for quite some time. This is a great chance to cash in your gold.
If you’re looking to invest in gold, get in touch with our team of experts at Orion Metal Exchange. We are a gold and silver investment company that’s working toward ensuring our clients’ financial stability and well-being. We also offer a secure storage platform for all our investors. You can visit our website to learn more about all our services!