Gold. It’s the asset that everyone puts trust in.
Gold’s status as a safe-haven has endured the test of time. It has been through more economic crises than any other asset and has outlived them all. It has been used as a store of value for centuries.
In today’s uncertain world, gold has never been a more attractive asset. Conflict and unease are the words on everyone’s lips. Politics and markets have never felt more divided.
From North Korean missiles, to a debt fuelled crises, tensions are high. We don’t know what, when or how something is going to pop, but everyone is waiting for something to give.
Gold Shines During our Darkest Days
For example, after the 2001 September 11 attacks, gold prices rose. After the Lehman Brothers imploded, the height of the global financial crisis, gold rose. Every time North Korea shoots another rocket, gold rises. It’s like clockwork.
But unease isn’t the only factor that affects gold price.
Keep in mind, gold has always been valuable because it is rare. There is only a certain amount of the metal to go around. There are still plenty of hopeful miners that are scouring the earth for the precious metal, but eventually there won’t be any left to mine.
Gold Production Set to Decline?
And one man thinks we’ve already potentially passed peak gold production. The chairman of the World Gold Council Randall Oliphant, believes that production could be set to decline. Which means that gold prices might be on the up. Oliphant comments:
‘It’s not clear how the whole U.S. political system will play out.
‘All this uncertainty seems very fertile ground for people to get into gold.
‘Prices could climb to as high as [US]$1,400 an ounce in the next 12 months, and top record highs in the medium term…’
Supply is tightening and demand is rising. Though it’s all speculation at this point.
As Oliphant comments in regard to gold supply:
‘We’re not going to fall off a cliff in the near term, but in the same time it’s really hard to see how we’re going to produce enough gold to meet all this demand’.
It’s all a matter of circumstance. Though the thought of a rising gold price certainly has a lot of appeal during these troubling times.
Markets & Money editor, Vern Gowdie believes that collapse could be here sooner than you think.
Junior Analyst, Markets & Money