<p class=“MsoNormal“>Gold has been
historically regarded as a safe haven, a backup for fiat currencies, and a
secure asset for the storage of value for many centuries. </p><p class=“MsoNormal“>Nations, investors, and
traders trust the value of gold, not just for its intrinsic & unique
properties as a metal or commodity, but also for its embeddedness in the
cultures and religions of various regions.</p><p class=“MsoNormal“>Throughout the past
century or so, gold has represented an asset which protects investors, corporations,
and countries against inflationary pressures. </p><p class=“MsoNormal“>Time and time again,
the precious metal was used as a hedge against economic recessions and
uncertainty, but this may not be the case in the modern era of volatility, high
inflation and increasing pessimism.</p><p class=“MsoNormal“>As seen in the chart
above provided by Macrotrends, the price of gold relative to the U.S. dollar
has been accelerating exponentially over the last hundred years, especially
since 1975.</p><p class=“MsoNormal“>The grey areas
represent recessions, and it can be noticed that the value of the bullion
propels higher when economies are swimming in calamity. This is because gold is
regarded as an asset which protects against macroeconomic contraction.</p><p class=“MsoNormal“>The Great Recession of
the 1930’s, Dot-com bubble of the early 2000’s, the stock market crash of 2008
and the COVID-19 pandemic are all examples of economic recessions which witnessed
the rise of the precious metal and the fall of dollar-backed assets such as
equities, bonds, and real estate.</p><p>Is Gold Still
a Safe Haven?</p><p class=“MsoNormal“>It’s not very easy to
answer this question. The trajectory of gold has been downward trending since
the start of the year, as can be seen in the chart provided by TradingView.</p><p class=“MsoNormal“>Macropolitical unrest,
growing pessimism and sky-high inflation has swayed investors away from
dollar-backed assets, but gold as well. Typically, investors would go on a gold
rush in times of fear and volatility, and head towards the yellow metal for
safety. </p><p class=“MsoNormal“>Now, in the modern era
of high pessimism and short-lived rallies, investors are skeptical to invest
even in safe havens. The Japanese Yen, a currency regarded as a safe haven as
well, has plummeted to 20-year lows at some point, and still isn’t seeing the
brighter side of day.</p><p>So, what now?</p><p class=“MsoNormal“>Gold is gold, and
bullion fanatics believe in the value and potential of gold as a final resort
when things turn sour. Analysts believe that as markets begin to recover, gold
may witness a surge in value once again.</p><p class=“MsoNormal“>The coalition between
Brazil, Russia, India, China, and South Africa (BRICS) plan to create a
currency backed by gold, which is not linked to the U.S. dollar greenback. It’s
meant to rival the USD amid macropolitical turmoil, and since nations believe
in it, investors and traders will eventually follow suit.</p><p class=“MsoNormal“>It’s the time for gold
to shine, sooner or later. Much of gold’s future direction would depend on what
happens next in the Russia-Ukraine conundrum, China’s initiatives on
‘peacefully’ taking over Taiwan, and how red-hot inflation across many regions
plays out in the coming months.</p><p class=“MsoNormal“>Prepared by team of
Goldenbrokers</p>
historically regarded as a safe haven, a backup for fiat currencies, and a
secure asset for the storage of value for many centuries. </p><p class=“MsoNormal“>Nations, investors, and
traders trust the value of gold, not just for its intrinsic & unique
properties as a metal or commodity, but also for its embeddedness in the
cultures and religions of various regions.</p><p class=“MsoNormal“>Throughout the past
century or so, gold has represented an asset which protects investors, corporations,
and countries against inflationary pressures. </p><p class=“MsoNormal“>Time and time again,
the precious metal was used as a hedge against economic recessions and
uncertainty, but this may not be the case in the modern era of volatility, high
inflation and increasing pessimism.</p><p class=“MsoNormal“>As seen in the chart
above provided by Macrotrends, the price of gold relative to the U.S. dollar
has been accelerating exponentially over the last hundred years, especially
since 1975.</p><p class=“MsoNormal“>The grey areas
represent recessions, and it can be noticed that the value of the bullion
propels higher when economies are swimming in calamity. This is because gold is
regarded as an asset which protects against macroeconomic contraction.</p><p class=“MsoNormal“>The Great Recession of
the 1930’s, Dot-com bubble of the early 2000’s, the stock market crash of 2008
and the COVID-19 pandemic are all examples of economic recessions which witnessed
the rise of the precious metal and the fall of dollar-backed assets such as
equities, bonds, and real estate.</p><p>Is Gold Still
a Safe Haven?</p><p class=“MsoNormal“>It’s not very easy to
answer this question. The trajectory of gold has been downward trending since
the start of the year, as can be seen in the chart provided by TradingView.</p><p class=“MsoNormal“>Macropolitical unrest,
growing pessimism and sky-high inflation has swayed investors away from
dollar-backed assets, but gold as well. Typically, investors would go on a gold
rush in times of fear and volatility, and head towards the yellow metal for
safety. </p><p class=“MsoNormal“>Now, in the modern era
of high pessimism and short-lived rallies, investors are skeptical to invest
even in safe havens. The Japanese Yen, a currency regarded as a safe haven as
well, has plummeted to 20-year lows at some point, and still isn’t seeing the
brighter side of day.</p><p>So, what now?</p><p class=“MsoNormal“>Gold is gold, and
bullion fanatics believe in the value and potential of gold as a final resort
when things turn sour. Analysts believe that as markets begin to recover, gold
may witness a surge in value once again.</p><p class=“MsoNormal“>The coalition between
Brazil, Russia, India, China, and South Africa (BRICS) plan to create a
currency backed by gold, which is not linked to the U.S. dollar greenback. It’s
meant to rival the USD amid macropolitical turmoil, and since nations believe
in it, investors and traders will eventually follow suit.</p><p class=“MsoNormal“>It’s the time for gold
to shine, sooner or later. Much of gold’s future direction would depend on what
happens next in the Russia-Ukraine conundrum, China’s initiatives on
‘peacefully’ taking over Taiwan, and how red-hot inflation across many regions
plays out in the coming months.</p><p class=“MsoNormal“>Prepared by team of
Goldenbrokers</p>
This article was written by ForexLive at forexlive.com.