One of the unresolved issues underpinning gold’s meteoric rise in recent times was (seemingly) solved over the weekend — so what are the next unresolved issues set to deliver gains?
Investors’ eyes were squarely trained on Osaka over the weekend for the G20 meeting, and in particular a meeting between US president Donald Trump and China president Xi Jiping.
As regular readers of Star Investing would know, the pair have been locked in a game of brinksmanship over trade — which has threatened to destabilise international trade.
But progress has seemingly been made, with Trump and Xi agreeing to restart talks which had stalled — with tariffs against other Chinese goods to not take effect.
The uncertainty over trade had been one of the key drivers of gold’s rise in recent times, as investors sought a ‘safe haven’ investment — with gold hitting six year highs.
So, is this the end of gold’s meteoric rise? Don’t be so sure.
There are still a raft of issues live which make gold’s outlook rosy.
Firstly, there’s ongoing tension between Iran and the US which may drive geopolitical uncertainty into the future.
Then, there’s charting the consequence of a hard Brexit, as it advocated by likely UK conservative Prime Minister Boris Johnson.
But the biggest of drivers is the prospect of official rate cuts on two continents, with the European Central Bank and the US Federal Reserve both signalling rate cuts in recent times — a sign that the economy worldwide needs stimulus.
So while gold could take a dip in the short term, the medium-term outlook continues to look rosy for the precious metal.
This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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