Will Recent Political Developments Spark A Gold Rally

Financialnewsmedia.com News Commentary

PALM BEACH,  Fla., Aug. 13, 2020 /PRNewswire/ -- Recent financial market reports are all showing that, with gold, the past is the present… again. Gold has historically been a safe haven during times of uncertainty and the markets are once again turning to gold in the face of the current global world health crisis. Last week, gold prices surged above $2,000 per ounce for the first time. An article on CNBC reported insider insights on gold, saying: "Gold prices could forge ahead to $4,000 per ounce in the next three years, but factors such as the development of a coronavirus vaccine and the November U.S. elections could change the fortunes of the precious metal, analysts say. This year, gold prices have shot to record highs not seen since September 2011. Investors have been fleeing to "safe haven" assets as the pandemic shows no signs of abating. Last week, gold process surged above $2,000 per ounce for the first time. "It's quite easy to see gold going to $4,000," Frank Holmes, CEO at investment firm U.S. Global Investors, told CNBC on Monday." Active companies in the industry making moves include: U.S. Gold Corp. (NASDAQ: USAU), Barrick Gold Corporation (NYSE: GOLD) (TSX: ABX), Pretium Resources Inc. (NYSE:PVG) (TSX: PVG), Great Panther Mining Limited (NYSE: GPL) (TSX: GPR), Hecla Mining Company (NYSE: HL).

The CNBC article continued with: "He pointed to the trillions of dollars needed in stimulus to tide the U.S. economy during the coronavirus pandemic, and added that G-20 finance ministers and central banks are "working together like a cartel and they're all printing trillions of dollars. We've not seen this level where central banks are printing money at a zero interest rate. At zero interest rates, gold becomes a very, very attractive asset class," Holmes said. "A looser monetary policy generally means investors are more likely to seek out gold as an asset. When real yields go down, gold prices will go up, and vice versa. In such a scenario, the opportunity cost of holding gold, a non-yielding asset, is lower as investors are not foregoing interest that would be otherwise earned in yielding assets. Spot gold prices recently hit $2,028.32."