Gold prices have hit new all-time highs jumping over 30%+ so far this year, which beats even the high-flying Tech Sector as the top-performing investment for the 1st half of 2020. As the Fed continues to “print money” to help guide us out of this recession, many are turning to gold as a hedge against the devaluation of the US dollar along with the continued economic/political instability.
During years when inflation has been over 3%+, Gold has averaged an annualized return of 9%+.
Though in a moment where Jewellery sales have been depressed, its investors who have been pushing prices upwards:
This creates risk for when investors decide to move on to the next “hot” trade (See 2012 – 2015), commodities are not able to mitigate downturns because of their lack of generating revenues, profits or dividends. For instance, let us examine oil, a far more important resource for our economy than gold. While the stock market indices were falling from late February through March, so too were oil investments. But unlike stocks, oil has still not recovered…
We are not predicting a return to the gold standard for the US Dollar anytime soon but in 2020 anything is possible (in a less than good way). With unprecedented global fiscal and monetary stimulus, declining yields, and market instability we could see these trends continue to the end of the year and at the very least, MC Hammer will likely make it back to our televisions to urge everyone to check their bedroom dresser drawers for his Cash4Gold Enterprises.
With Dan Gilbert’s Quicken Loans IPO filing that makes for 22 publicly traded companies in Detroit! See our thoughts in USA Today featured in the first article below: