There’s no question that everyone wants the global pandemic to be over, but excessive optimism in a short amount of time is a sign of wishful thinking.
While reasons for optimism are growing, there is still an overwhelming amount of fear and uncertainty revolving around our nation.
The reality is the US is still facing major economic obstacles. Lawmakers in Washington are trying to avoid a government shutdown by buying more time with a short measure to extend the government funding deadline.
For one, this means more than 10 million Americans are projected to lose their unemployment benefits if an agreement is not met. This could prove to be disastrous for consumer spending and the limited economic recovery we’ve seen so far.
We don’t need legislation to agree on everything, but what we do know is that Congress needs to either pass a stimulus package or let the American people know no stimulus is coming.
Economists are concerned about the rising long-term unemployment, even amidst an approved vaccine. According to CNBC, long-term unemployment exceeded 40% of the total unemployment for three years after the Great Recession.
And speaking of long-term, we still don’t know how COVID will affect our economy in the next year, three years, or five years.
Add this all together and we’re faced with significant issues weighing on Americans nationwide.
While nearly every other market saw a horrible performance in 2020, gold had a breakout year up more than 17% just this year alone.
In fact, three of the nation’s largest and well respected financial companies all stand firmly on their technical analysis of gold seeing additional upwards price movement, and two believe it will surpass its all-time high.
Citigroup analysts are calling for a $2,500 gold price in 2021, nearly 25% higher than its all-time high in 2020.
Goldman Sachs is bullish on its call of a $2,300 gold price in 2021, as well as Bloomberg at $2,000.
The three companies share similar reasonings for their beliefs that are also supported by standard fundamentals. Historically, gold has always acted as a safe haven in uncertain times.
The Federal Reserve vocalized their promise to keep interest rates as low as possible for as long as need be.
This means that the money printers will continue to run, leading to a continuous rise in inflation- forcing others to seek safety and shelter for their wealth.
We all saw the economic impact that covered COVID’s first wave. Now with the number of deaths and infections at an all-time high, concerning unemployment, and no stimulus agreement, what can we expect after the second wave?
Whether it’s another bull run or the safety of your wealth, gold may be your answer to both.