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Gold, One of the Best Safe Investments of Today, a Heated Debate

Gold, One of the Best Safe Investments of Today, a Heated Debate

The noblest of metals has always been considered as the safe-haven asset par excellence, and the reasons are known to all investors and soon said: gold as a physical asset of always high value is not subject to the risk of default, putting the investor always at the refuge of the Sword of Damocles of inflation and rising prices. Moreover, the gold market is known for the low volatility that characterizes it, as it has a value that has always been constant and that limits to a minimum the ups and downs on the charts.

Gold: the safe-haven asset par excellence, but also in 2017?

As one of the best safe investments the safe-haven asset proves to be an excellent financial shield even in times of crisis, but this is a far from absolute statement: of course, gold, like all other assets and financial markets could also suffer abrupt shocks in case of particularly serious geopolitical events, and of course we are talking about variables extremely difficult to calculate, and that must be evaluated each time depending on the individual case. Think, for example, of Brexit, its impact on the markets has been calculated several times, and just as many times wrong and overturned, without there being a clear and absolute position on it yet.

Between Brexit and Trump, the consequences of 2016 on the price of gold

Undoubtedly 2016 was a year of crisis and unpredictable political, economic and social events worthy of note, first of all the Brexit and the election of Donald Trump as 45th President of the United States, facts that have left their mark even in the usually evergreen gold market, both positive and negative. The difficult situation of European and Italian banks in particular has certainly favoured the growth of the price of gold: many investors have realised that they have entrusted their savings to credit institutions that are less solid than they appeared to be, and have wisely preferred to fall back into the always advisable category of safe haven assets. Moreover, as already mentioned, the widespread post-Brexit fears and the complicated European austerity have facilitated a gold rush throughout the Old Continent, always seen as a rocky foothold in which to invest savings, and in fact during the year the blond metal has reached peaks for years immaculate, reaching a record price of 1329 dollars per ounce (equal to 28.35 grams).

But what are the scenarios for the metal blond for 2018 that have just begun? Many analysts and experts seem in fact to agree that the rise in gold is just dripping, and there are many who even talk about a possible reversal of the trend. But let’s go in order, and start from the sources: the analysts we are talking about are those of the prestigious Dutch bank ABN Amro and the French Natixis, according to which traders are unlikely to accumulate positions and it will be easy to see huge sales in case of major changes on the chart. In short, the forecasts for 2018 do not seem to be the most solid according to several reliable sources, which draw an immediate future for gold not particularly serene. However, there is no lack of other more optimistic opinions, according to which, on the contrary, the climate of tension and delicate international geopolitical balance could push investors again towards blond metal, seen by most of them as a safe haven, especially in times of crisis.

It seems, however, that expectations remain bearish for 2017 of the gold market, the price of which could be negatively affected both by the rise in Fed rates, which is still far from certain, and by the possible increase in bond yields, which could help to move investors away from the usually appreciated safe-haven assets. In any case, these forecasts are far from certain, although they come from prestigious institutions and credit institutions, including Credit Suisse and Societe Generale. The year 2016 has in fact accustomed us to forecasts that are as reasoned as they are not respected by events, just think of the already mentioned Brexit and Trump, both international market mover and of strong impact of which the consequences at an economic level are still not really clear. Much more will depend in the next few days on the Fed meeting and the decisions of Janet Yellen, who could make the long-awaited rise in rates, but for now unfortunately not many certainties remain for this interesting sector. In fact, at the end of 2016, before the election of Trump and the postponement of the Fed, the forecasts were far from negative, indeed it was expected to reach in 2017 the highs already touched in the previous year.

In any case, it remains one of the most solid, versatile, sought-after and precious physical assets in circulation, and in any case, even in case of crisis, it would find its way back up again, as it has always been for this noble metal.

Howard

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