In recent years, the world economy has gone through difficult times, in which investors have had to take different measures not to lose all their capital. At present, the markets remain unstable due to problems such as the insecurity of the Brexit wave trade war between the United States and China, so any financial decision should be made with caution. However, in times of crisis, there are a series of safe haven assets that can help maintain the value of our capital, such as the gold metal.
There are a number of reasons why the price of gold remains more or less stable whatever the economic situation, although it is usually lower when it is stable. Unlike traditional currencies, whose production depends on a central bank, the amount of gold that appears annually is limited to its extraction, so it is easier to determine how much there is at any given time. This provides security to the investor, who can make long-term plans and diversify his portfolio.
The manager Merian Global Investors, Ned Naylor-Leyland, stated that the gold metal is the only safe haven asset without risk, and that for this reason central banks own approximately one 70% of this one. However, he cautions that this translates into minimal benefits. Due to this phenomenon, in times of economic stability its price falls, since investors are confident enough to move their capital to risk assets. Although with these you can obtain notable gains, it must also be borne in mind that it is much easier to lose everything deposited.
In recent weeks, markets have been less volatile thanks to the apparent truce between the United States and China, which have given in several ways to put their trade war aside for now. Consequently, gold has had a slight drop, although according to data provided by the World Gold Council, the gold metal had a rise in the first half of the year. 8%. This increase was due to the instability of the markets, for reasons such as the aforementioned commercial conflict or the doubtful economic situation in the United Kingdom.
According to the newspaper Extension, if a peace agreement between North America and the Asian country is not formalized, the price of gold could increase up to a 13% compared to its price in August. It is also noted that some experts such as Carsten manke, commodities analyst, believe that the metal rally could have ups and downs even if it ends with a positive balance. Therefore, Manke recommends that those who already have gold keep it, while the rest wait for another time when prices are more stable. Thus, gold continues to be a safe haven asset, since despite its occasional variations it maintains a similar value throughout the year.