Gold Shines Bright amid Global Uncertainty

The war of words between Trump and Kim Jong-un took a sharp turn for the worse, this week.

Trump recently threatened to ‘totally destroy’ North Korea if they continued to test nuclear missiles. He said this in front of the entire UN General Assembly.

Rather untactfully, he also referred to Kim as a ‘rocket man on a suicide mission’. And later tweeted that North Korea wouldn’t ‘be around much longer’ if they continued to act aggressively.

Pyongyang responded in kind, with an open letter sent to numerous international parliaments. It deemed Trump’s comments an ‘…intolerable insult to the Korean people, a declaration of war against the DPRK and grave threats to the global peace’.

Tensions are clearly at a high. The game of insults between the two leaders appears to be escalating into a tangible threat.

While it’s hard to know what will happen next, it’s better to be safe than sorry when investing.

In times like these, filled with global uncertainty, provocative presidential tweets and rogue nations, commodities are waiting with open arms. Gold in particular, provides a shiny safe haven from a rickety marketplace.

Humans have been fixated on gold since the dawn of civilisation. Flocking to it like magpies, we seemed to know the glittering metal was something precious. We adorn ourselves in it, give it to our loved ones as gifts, and rush to it in times of crisis.

When Britain voted to leave the EU in 2016, Google trends reported a 500% increase in searches for ‘buy gold’.

And in the year after the 2008 financial crisis, gold prices rose 24%.

Even Trump himself recognises the security gold represents. According to the Federal Elections Commission filing, he owns $100,000–200,000 in gold bullion.

During this ongoing US–North Korea tension, Gold has remained a stable investment. As Ryan wrote on Tuesday, every time North Korea shoots a missile, gold rises.

This week’s fiascos confirm this. Bullion rose 1% after the North Korean foreign minister asserted that NK had the right to ‘shoot down US bombers’ if they were within or near their airspace.

When the US dollar is down, historically gold rises. Any time of instability for the US is the perfect climate for gold to thrive. In the midst of geopolitical tension, it has always been the commodity you can put your trust in.

That’s been the case historically. But recent years have seen new alternatives rise to challenge gold’s place as safe haven. Cryptocurrencies like bitcoin provide a new way to opt out of national currencies like the US dollar. Will they stand the test of time, like gold has? It’s far too early to tell. But with the kinds of gains that have been made in just a few years, can you afford not to at least look into it? Learn more here.

This week in Markets and Money

On Monday, Ryan wrote about Elon Musk’s Hyperloop train, which could see you travel from Melbourne to Sydney in 55 minutes. While this is exciting in itself, what’s more interesting is how this tech could change the way we work. If you no longer need to live close to your place of employment, this could drastically impact the property prices in Australia’s major cities.

To read the full story, click here.

On Tuesday, Jason considered Dennis Gartman’s idea of bypassing central banks and using gold as an alternative currency. Jason doesn’t think this can happen just yet. But with growing global uncertainty and a weak US dollar, gold is definitely something to keep your eye on.

To read why, click here.

On Wednesday, Jason gave a simple investment tip. Trade with the trend. And right now, crude oil is the hot topic. After numerous threats to oil supply, like OPEC’s cap on oil output and the Turkish President’s threat to cut Northern Iraq’s oil flow to the rest of the world, crude oil stocks might be set to skyrocket.

Read the full story here.

On Thursday, Shae commented on the short term memory of the market. Very few people remember China’s currency devaluation of 2016. Or even when the markets took a beating after the Brexit vote. It’s this forgetfulness that lures us into a false sense of security. But with global debt at a high and property bubbles popping up all over the world, now is the time to pay attention.

To read the full story, click here.

On Friday, Shae noted that Aussie tourism is booming. So much in fact, that the profit generated from tourism matched that of Iron ore exports this year. The research confirms that tourism is becoming an important driver of economic growth. And with tourism numbers set to grow 6.2% per annum for the next three years, there are many opportunities to profit — if you know where to look.

To read the full story, click here.

Until next week,

Katie Johnson,
For Markets & Money

Markets and Money offers an independent and critical perspective on the Australian and global investment markets. Slightly offbeat and far from institutional, Markets and Money delivers you straight-forward, humorous, and useful investment insights from a world wide network of analysts, contrarians, and successful investors.

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