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There are various factors which continue to push up the gold price and make the case for now being the opportune time to buy gold. Two major ones include high levels of sovereign debt leading to currency debasement and increasing inflation, both of which have historically led to past gold price increases.
When a government is faced with a financial crisis, such as the global one of recent years, the obvious possible solutions are to cut costs, increase taxes or to borrow or print more money. The US, Greece and Japan are all at present experiencing such problems. They are keeping interest rates low in order to keep up with their present debts. However as their debts are become unmanageable they may see themselves forced to print more money which will devalue their currency.
So it can be seen, at present paper currency is not seen as a sound investment. The best sound asset is gold, the logical choice. Since gold moves inversely to the US dollar it is the wise safe haven for investment in today’s present economic climate. |