Gold have always worked as an amazing safe haven for societies in chaos. When the uncertainty hits, no one wants to have their savings in pure and simple paper money, with all the disadvantages it represents. What people want and need is safety.
For this motives, investors choose the yellow metal when the time to protect their assets finally comes. So yes, fear has always been a great trigger for pushing gold prices forward.
Now, the question is: what is fueling the price these days? What are we afraid of? Unfortunately, the list is long. In the following lines, we are going to address some key aspects of the toxic scenario.
Nationalists Parties Everywhere
Today’s economy works thanks to globalization. Even when the affected citizens in developed countries are complaining about it, we cannot go back to highly restricted trade and limitations for multinational companies to operate in low-cost regions.
But populism always works. Both the Brexit and Donald Trump are valid proofs of this. People in highly developed countries seem to be upset about the actual system and want “their jobs” back. This trend is growing at a worrying pace.
Having more nationalist parties ruling major countries would represent a major threat to globalization, and therefore, to the global economy. This scenario is bad enough to give chills to investors. Uncertainty is around the corner and gold bullion investments are always well positioned to benefit from it.
Conflicts are Escalating
There are a few major wars going on right now, even when western citizens do not notice it. The Syrian war and all the armed conflicts in Africa are quickly escalating. The biggest threat to global peace may be the Islamic State and its growing power.
Nevertheless, we should pay more attention to those parties with enough firepower to cause deep destabilization. Countries like USA, China, Russia, Iran, and North Korea seem to be playing a game in the shadows. No one is capable of forecasting what is going to happen exactly but raw ideas aren’t favorable.
These players have the nuclear potential to attack each other, leading the entire world to absolute chaos. This is not a scenario exclusive of a fiction movie. Full-scale war may happen in the world we live in and investors know it.
When conflict takes place and financial systems break down, paper money or stocks doesn’t have too much value. Hard assets like precious metals may be the way to go. This is a present sentiment right now.
Financial Crises on the Horizon
The recent crisis was dramatic enough to make the average citizen feel betrayed by the financial system. Many bankers are working in the shadows, doing things that are openly wrong for the common good, choosing to enrich themselves without ethics nor values.
People don’t trust the system like they used before 2008. With massive advancements in technologies and aggressive policies coming from major countries, new crises may be on their way.