According to the observations of analysts, in the past few days, the price of gold has stabilized near the mark of $ 1,200 per ounce. Experts attribute the rise in price of precious metals to the anxiety of market participants about a possible onset of a financial crisis.
Analysts believe that the precious metal is supported by political uncertainty in Italy, due to the adoption of the state budget. In an unstable situation, the yellow metal becomes a fully protective asset. Thanks to them, the efforts of market participants to preserve their capital are not in vain, analysts say. Other factors supporting the precious metal are the correction in the US stock market and the trade war between the United States and China.
According to financial analyst Joe Foster, the current situation in the financial markets is reminiscent of the 2008 financial crisis. The expert is confident that the market is now at the center of the inflation cycle, where key assets such as stocks, government bonds and real estate are involved. The cause of inflationary processes, Joe Foster, considers the policy of monetary stimulation by the leading central banks. At present, they have begun to tighten monetary policy, which has led to a liquidity deficit, the analyst believes.
Financial markets are worried about the high probability of a new financial crisis. Experts do not rule out that it will be triggered by a number of factors, such as an increase in interest rates, high risks of debt on loans, the budget crisis in Italy and the growth of debt in China.
According to Joe Foster, the catalyst for the next financial crisis in the United States can be any current problem, including the trade conflict, the growth of the US government debt and the mortgage crisis. The expert draws attention to the fact that global regulators are actively buying up the yellow metal again. According to the World Gold Council (WGC), the value of gold reserves of all central banks reaches an impressive $ 1.36 trillion, which equals 10% of world currency reserves. The main buyers of precious metals are Russia and China.
The analyst considers the yellow metal the most suitable asset for central banks, as it has high liquidity. Note that due to the growing geopolitical risks and the worsening economic situation, regulators are buying up gold at high prices. However, in the future, these costs will pay off, I'm sure Joe Foster.
