Gold Hits $1800 and is Going, Going…

Investors are going cross-eyed, as they keep one eye on a stock market that continues a sputtering climb and the other eye on growing reports indicating that the economic reopening may indeed have been substantially premature. While investors are pinning their hopes on surging optimism for a potential economic rebound, the news continues to report that thirty-seven states have seen an increase in COVID-19 cases over the past two weeks, with six hitting new single-day records. Even greater confusion is caused when the president claims that we have the “lowest mortality rate in the world,” catching administration officials flat-footed and causing them to respond like a deer in the headlights. The obfuscation intensifies when the president doubles down, saying that 99% of coronavirus cases are “completely harmless.”

Following the Lehman Brothers bankruptcy in 2008, gold initially dipped before rallying substantially in 2009. Gold hit its all-time high in 2011, after Standard & Poor’s downgraded the U.S. credit rating and Europe’s sovereign debt crisis sent a chill through global investors. Pending Congressional legislation indicates the potential replacement of our current paper currency with a Fedcoin digital currency, as early as the end of this year. Like the country’s credit devaluation in 2011, this transition could have serious and negative repercussions for the dollar’s value. As a result, investors are flocking to the safety and security of gold, again. This explains its 20% increase already this year.

Let’s not forget that earlier this year, in light of all that’s transpired, Bank of America revised their prediction of $2,000 per ounce gold by June of 2021, to $3,000 per ounce. Bank of America owns Merrill Lynch and having to admit that gold was set to double, when they made that announcement, had to be a bitter pill to swallow. But by crossing over the $1,800 barrier, the potential for gold to double from here by that time, has become a very real possibility. While it is possible that the market could continue to rise in the short term, any long term growth potential quickly dims with every delayed opening and especially with an increasing number of reversed openings, due to rising infection rates of the coronavirus. The growth of gold’s value is a clear sign of economic stress and despite a big tech rally it’s quite possible that the market has already played its hand.

Using gold as a hedge against a potential economic downturn is always a good option, perhaps now more than ever before. The Fed is trying to spur spending by flooding the economy by injecting more money into the system, but citizens are more concerned with survival at the moment than any type of luxury spending. Ultimately, all of this stimulus will serve to weaken the dollar, such that by the end of the year, the confluence of forces could result in a severely damaged economy and dollar. Contact the experts at American Bullion now for assistance. Call (800) 653-GOLD (4653).