A multitude of factors supportive of gold are beginning to play out on the global stage as world leaders consider yet another round of fiscal and monetary support to keep their economies ticking over through the continuing challenges of the pandemic.
As we noted in our 2021 brochure at the start of the year, experts from across the board cite have repeatedly cited a weaker US dollar, ongoing economic stimulus measures and looser economic policy as being bullish for gold and cause for continually higher prices as the year progresses.
We are seeing these scenarios now playing out, with both the UK and US governments preparing to initiate substantial new economic measures, giving gold a boost of support ahead of an expected reigniting of its pandemic-provoked bull run.
In the UK, rumours have begun to swirl that chancellor Rishi Sunak will announce an additional extension of the furlough scheme which has seen the government paying the wages of millions of workers for almost a year. It is also thought that tax increases will not be on the cards when he delivers his budget in two weeks time.
Across the Atlantic, the Biden administration is pushing for an expansive almost two trillion dollar relief package to be pushed through. Voting on the bill is due to begin in the next few days with a view to it being deployed as soon as the end of this month. The bill includes provisions for more stimulus cheques to be sent out to the millions of out-of-work Americans, a raise in the minimum wage and extension to child tax credits.
Reuters cited Commerzbank as being bullish on rising gold prices in this environment, reporting today (Friday) that, “Commerzbank analysts said in a note that gold’s behaviour resembled that of a tsunami with the water receding in the first phase (the gold price falling) and then coming back all the more violently (the gold price rising significantly).”
The time frame to invest before that tsunami of significant prices is clearly small, with the UK and US measures due to be enacted at any moment. Act quickly, buy now.