The precious metal that is firmly supported by “a multitude of bullish steel wind”, including the rate of President Trump, who threatens to ignite a new era of trade wars and global uncertainty. Last Wednesday Hotte Trump Europe as his next goal of announcing plans to impose 25% rates for the import of the European Union.
Since President Trump’s erratic foreign policy generate a new wave of inflationary pressure to worry about stagflation again as a real possibility for the rising expectations that Trump’s “America-First” policy will harm the world economy and limit the ability of central bankers to maneuver.
Another important catalyst is central banks around the world that keep gathering gold in a record pace while aggressively diversifying the US dollar.
And they are not just central banks. At the moment the world is experiencing a run on physical gold like nothing we have ever seen before.
Interesting is that the US leads the peloton and huge amounts of available gold internationally swallowed up, which can ultimately lead to a shortage and prices.
Since President Trump’s inauguration, traders and financial institutions have collected stocks of Gold on Comex – the Commodity Exchange of New York. In exchange, America’s “New Gold Rush” has deposited commercial safes in London, Switzerland and Singapore.
And last but certainly not least-de de-globalization movement, which has officially been introduced a new phase on expectations of incoming trade wars, tit-by-tat rates and protectionist policy-worth countries around the world are forced to prioritize their national interest over worldwide interest.
To quote analysts at GSC Commodity Intelligence – “this is perhaps one of the most inflato factors of everything that is guaranteed to increase the gold demand and to stimulate prices a lot higher compared to the current level”.
No matter how you look at it, one thing is clear. The case for precious metals in a well -diversified portfolio has never been so clear than it is now. Any substantial pullbacks must be seen as buying options because the prices do not stay low for long!