Friends, buckle up! The market is screaming ‘risk aversion,’ and gold is responding with a vengeance. Trump’s lingering tariff policies have deeply fractured supply chains, hitting retailers – the backbone of the US economy – squarely in the gut.
Photo source:www.bullionbypost.co.uk
And let’s be real, the whispers of a US recession are getting louder, and frankly, they’re eroding faith in the dollar. We’ve seen the dollar tumble to levels not seen since October, sending a clear signal.
Where does the money go when fear takes hold? You guessed it: the classic safe havens – Swiss Franc, Japanese Yen, and of course, gold. This isn’t just about fear, though. Inflation expectations, the growing narrative of ‘de-dollarization,’ and plain old currency debasement are all piling onto the bullish side.
Let’s break down what’s driving this move:
Firstly, geopolitical instability often pushes investors towards stable assets like gold. Gold traditionally maintains its value during times of global uncertainty.
Secondly, persistent inflation erodes the purchasing power of fiat currencies. As a store of value, gold can hedge against inflation.
Thirdly, movements away from USD reliant financial systems are supporting gold’s attractiveness as an alternative reserve asset.
Now, the big question: can gold maintain this momentum? We’re dangerously close to the inflation-adjusted high from 1980 – a significant psychological level. While the short-term outlook appears decidedly bullish, a rapid ascent like this always invites profit-taking. Monitor fund flows closely. A correction at these levels isn’t out of the question, so tread carefully and adjust your positions accordingly. This isn’t the time for reckless exuberance! Understand the risks, and protect your capital.
