There are some investors who might think that they have missed out on the 2020-2021 gold price rally when gold reached $2,000. That might not be the case. According to economists, the gold price is poised for further increase in the not-so-distant future. The fact is, there is still a large possibility that the price of gold might keep going up. It might have slipped from $2,000 but it is not a long way off from hitting its highest. Check what some of the hedge fund investors are doing. They are banking on the decline of the US dollar and diversifying their portfolios with gold to protect their wealth against the economic risks that are still out there.
Seasoned gold investors know which factors to watch or which country they should be looking towards as far as the trajectory of the gold price is concerned. China is one country that has been making headlines as far as gold is concerned. China and India have been the two major consumers of gold for centuries. This is because gold plays a very important role in the culture and religion of both countries. In the last 12 months, China purchased more gold worth billions. India’s hunger for gold has also not abated despite its economic hardships. It is better to have stacks of gold in India than it is to stack Rupees. In the last decade, India’s demand for gold rose by more than 25% even when the price of gold was not doing so great. The gold bought by India doesn’t end up being used in industrial applications or being vaulted. Gold in India is largely bought by individuals. It is one of those things that are necessary for every household.
There is generally growing demand for gold globally. This is in reaction to the prolonged turmoil in the global markets. Economists are mulling over the troubled politics in the U.S, the issues created in the U.K by Brexit, the never-ending war against terror, countries like Russia flexing their military prowess against smaller, nearby nations, vulnerable economies, coups, etc. The list is long and it doesn’t look like it will change any time so we can expect turmoil in global financial markets and growth in the price of gold. Amid fears that the United States will default on its enormous debt, economists are also mulling over the prospect of a financial collapse in Greece, and the impact it may have on other vulnerable European economies.
In addition to a growing worldwide demand for gold, investors in troubled economies are snapping up gold reserves as questions about their paper currencies linger. Some currencies have completely lost their value like the Venezuelan Bolivar which has become less valuable than the price of toilet paper. Venezuela has turned to gold. You can pay an eighth of a gram of gold to get a haircut in Venezuela. Greek investors have expressed a recent, significant demand for gold, and analysts expect the demand for gold to increase in persistently troubled countries in Europe and North America. All major European fiat currencies have fallen against the price of gold, and investors are scrambling to cover their potential exposure to dramatic drops in the value of their primary currency-based assets.
Investing in gold remains both easy and private for individuals, and the gold market operates independently of those for currency-based assets. The price of gold is poised to protect buyers against losses in the value of paper currencies, and many investors are moving to add gold investments to their current holdings. For investors who are considering the potential of gold, significant indicators show that now is the best time to be buying gold.