Gold price perspectives are quite bright, since the preeminent precious metal in investment circles, can reach highs $8,000 even without a crisis. This is according to Frank Holmes, CEO, and chief investment officer at US Global Investors.
In investment circles, analysts tend to associate very high gold prices with financial turmoil. For example, gold prices rallied to $2,000 after the great financial crisis of 2008-09. Central banks, led by the Federal Reserve, took the radical measure of quantitative easing to print tons of cash to breathe life back into the world economy. At such times of fiat money glut, the values of the respective currencies diminish relative to stable real assets like Gold as inflation wiped trillions.
Whilst the yellow metal has held steady even in times of relative prosperity, investors are circling around with the likelihood that global growth will stutter in the short term. Even the IMF and the World Bank have recently stated their negative outlook on the global economy. At the moment, gold is enjoying a relatively prolonged bull run having really bright gold price perspectives.
However, prices have dropped slightly in recent weeks because intense hype creates a fear-of-missing-out (FOMO) rush that is detrimental to prices as it artificially pushes prices higher than where it should be. As a result, the momentum toward the watershed mark of $2,000 looks elusive for now.
Still, it is important to note that the current prices of about $1,500 an ounce are in a relatively stable economy. A market like the USA has its stock markets at record highs. Gold prices, therefore, have several triggers over and above direct relation to a time of crisis.
Monetary Policies
Perhaps the world economy can keep growing for the near term. However, monetary policies across the world to double down on growth effectively water down the value of the respective currencies. At the moment, the interest rates in most developed countries are really low.
In Denmark, for instance, you have Jyske Bank issuing mortgages at negative interest rates to encourage lending. This era of low-interest rate looked to be temporary in the aftermath of the last financial crisis but has developed a semblance of permanence. Borrowing has never been cheaper with US 30-year, fixed-rate mortgage is currently at a remarkable 3.6 percent according to Freddie Mac.
Gold is, obviously, a real asset because it does not derive its value on any other asset class. With the value of government bonds slated to remain low, it is logical to expect that gold will increasingly prove a store of value (SOV). As governments continue to push lending, the price of gold will go up considerably. Over a prolonged period, gold will appreciate because governments will print fiat to prolong growth as long as possible in the process of diluting their value. The scarcity and the finite supply of gold provide consistency.
Other Demand Factors for Gold
An underrated factor behind gold prices surge in the past two decades is the increasing demand from Eastern countries. The most prominent is China which is purchasing gold at record levels. India also has a strong demand from ordinary people as jewelry.
The fact that these two are growing economically faster than Western nations, hundreds of millions of people will have extra capital to invest. Gold is a luxury item, jewelry and also serves as a safe haven investment for ordinary people. Therefore, this demand has been and will continue to be lucrative for gold dealers.
Couple this with the fact that the Chinese government is notorious for devaluing its currency for trade reasons and even a blind man can see that Chinese investors’ demand for gold will continue to be strong. In India as well, higher incomes are driving the increased purchase of gold.
Gold Price Perspectives and Strong Demand
The strong demand will sustain gold prices growth. That said, the jury is still open on how rapid the appreciation will be. Therefore, a gold expert like Frank Holmes advises that prices of up to $8,000 are not entirely out of the question. Gold has several price triggers over and above the situation of a 2008 type financial crisis. The currency devaluation around the world will be the key to gold prices rising.
Thing is, the world is not in the middle of a major war or recession makes it even more remarkable. Assets, whether art, vintage items or precious metals currently have historic values. Gold has a long track record as a stable asset to hold. So, the convergence of factors that create uncertainty in the global financial market has potential rewards for gold markets.
Ultimately, gold is a psychological investment. Gold does well when there is less confidence in mainstream financial institutions and their capability to steer the economy properly. As the fears about the purchasing power of fiat grow, the times portend well for gold prices. Compound this with trigger events like Brexit in the short-term and it is highly likely that gold price perspectives will shine in the future whether or not the world undergoes a full-blown crisis.Gold Price Perspectives
The Utility of Tokenized Gold
From the aforementioned, it is evident that getting into the gold market now is opportune. However, gold trading in the real world has its own unique set of challenges. Gold is a precious commodity and naturally attracts fraudsters.
Moreover, gold sourcing verification is important to curb illegal gold mining in unstable countries using child labor. Then there is the fact that physical gold trading is bulky. Furthermore, handling gold is inherently dangerous because of its value.
Tokenized gold trading is a remarkable development in this field. Novem Gold uses blockchain technology to create a unique gold trading marketplace. Our clients have the assurance of gold experts handling their precious metal in Trisuna Lagerhaus OZL in Triesen, Liechtenstein.
Investors can trade directly using NVM and NNN tokens, the latter of which is directly redeemable in LBMA-certified gold even in the event Novem Gold goes bankrupt. Novem Gold eliminates the inconvenience of physical gold sale, insecurity of personal storage and verifiability issues in purchase all at once.
It represents the best of technology and expertise disrupting an industry fundamentally. At the moment, you can visit our first brick and mortar store in Landstraße 1, 4020 Linz, Austria and have your gold tokenized for secure storage and seamless trading. Clients can be sure of quality controls and reliability in our systems.
By digitizing gold, you shift security and insurance costs to us. The NNN tokens give an investor an incredible amount of flexibility in the tokenized gold market. This is because you can trade with investors across the world without the baggage of logistics. This has to be the future of gold trading. Taking part in the tokenized gold economy is a no-brainer.
Buy Novem Gold’s NVM, ICO in Progress
Novem Gold is allowing investors to take part in actualizing our ecosystem through our ongoing ICO. NVM tokens are available at a discount, trading at only €0.55 till Oct 15, 2019, in the first phase of a three-stage crowdfunding process. Notably, investors have several options for purchasing NVM: Euros, SFR, BTC, ETH, NEO, and Gas are accepted. In the second stage, we will limit payment channels to NEO and GAS.
At Novem Gold, the entire point is to bring unparalleled transparency and reliability to the gold trading industry. This is the essence of blockchain technology. With experts in the international precious metals trade and the beauty of technology, Novem Gold will make this market more secure and transparent than ever. The future of gold trading is unfolding right before our eyes.
Learn more about Novem Gold and how you can invest in gold in a safe and secure way.
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