Gold has been creeping its way back into the system evenas the deadly COVID-19 hits the globe’s economy by storm.
Many experts still consider it the safest investment despite the accompanying challenges of what seems like a comeback!
Of late, the yellow metal has plummeted significantly, but Goldman Sachs believes recent steps by the Fed Reserve may turn things around and make it a lucrative asset.
According to Goldman, the slump witnessed recently is a copy of the 2008 case. But the Fed’s introduction of fresh liquidity injection facilities has seen prices for the yellow metal become stable as of last week.
The Fed’s announcement now “reverses existing funding worries and offsets the negative impact to [emerging market] wealth,” which explains why purchasing Gold at its current messed-up price is a well-thought-out move.
In Nov 2008, Gold plummeted by a significant 20 percent, and failed to hold the fort for investors when the US dollar got stronger.
And at that time, things took a turn soon after the Fed went public with news of “quantitative easing.” Gold prices began to go up, according to Goldman’s analysis.
“Now, we are looking at a similar pattern as gold prices got more stableduring the recent weeks and shot with the Fed’s announcement of fresh liquidity injection facilities”
On Mon, 23rd March 2020, The Federal Reserve announced unparalleled moves in a bid to save the economy amid the impacts of COVID-19. The announcement covered unlimited bond-buying among other facilities to help businesses and employees.
So all investors must stock some yellow metal at this time of tragedy. We must remember thatGold is liability-free, which is why it weathers all economic environments. Plus, unlike other precious metals, it isn’t a raw material for various roles so it can hold the fort for you during crises like Coronavirus.
And it seems investors have been eyeing this precious metal amid the virus. Bullion Vault, a famous web-based platform for precious metals reported an increase in the count of customers buying physical gold on its online market. The numbergrew twofold in a month, between Feb and March.
“We are at a defining moment where fear-driven Gold purchases will take over liquidity-based selling pressure like we witnessed in 2008,” says Goldman.
For that reason, the near and far tomorrow of Gold is promising and Goldman Sachs is optimistic the precious metal will hit the $1800/toz in a just a year.
Author Bio: Blair Thomas has been a music producer, bouncer, Screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated high risk merchant account processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books while helping retailers to set up Merchant Accounts For Precious Metals Dealers.