Gold Investment Thrives in a Contracting Global Economy

In the weeks following the Brexit decision, the UK has had to regroup financially. On the morning immediately after the referendum, the pound sterling plummeted to its lowest level in three decades. Despite some recovery, the drop in that currency’s value has stirred concern among investors and UK citizens.
 
Meanwhile, the Bank of England has dropped its rate from 0.5% to 0.25%, the lowest drop on record, and the first since 2009. The Bank has also hinted at the possibility of a further rate cut.
 
Under the circumstances, it should come as no surprise that, as soon as the most recent rate cut was announced, the Royal Mint in London reported that sales of gold coins and bars shot up by 50%. When rates drop, investors accustomed to interest-bearing instruments, are more enticed by the yellow metal.
 
Gold has moved up 25% this year, but if measured in sterling, it has surged 45%. Investors and traders are concerned with volatility in the stock market, and a weakening global economy.
 
Many analysts see the contracting global economy as lasting at least several years, and therefore project a multi-year bull market for gold. Central banks have subjected their respective countries to massive rounds of qualitative easing without any positive results. Global stagnation and the threat of negative rates still rule world markets. The Bank of Japan, Switzerland, Sweden and Denmark have already implemented negative rates, and US Fed Chair Janet Yellen has publicly ruled she has not ruled out the possibility.
 
Bond yields remain depressingly low. Professional observers think we’re now in a fertile environment for gold. Addressing a precious metals conference in Dubai last April, for instance, Diego Parilla declared continuing inept monetary policy could realistically push the shiny metal to $3,000 per ounce. Such policy, he feels, has caused one of the worst financial bubbles in history.
 
You should definitely consider investing in physical gold. Now that other markets are depressed, investors are flocking to gold to secure their retirement funds. So don’t expect the price to remain low for long. By acting now, you’ll not only be able to lock in a low price, but you can feel confident that your gold is negatively correlated to your paper assets.
 
For more information, call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.

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