Just because stock markets have yet to price in the weakening US economy doesn\u2019t mean that all investors are in the dark about what\u2019s going on. And that\u2019s why the gold price continues to rise, as the investors who understand what\u2019s going on are leaving stocks and jumping into gold. That\u2019s fueling continued strength in gold that should sustain high price levels for the rest of this year and well into the coming years.<\/p>\n
Many gold investors realize that the economic recovery that so many are hoping for isn\u2019t going to materialize. So many people have been put out of work in such a short amount of time that it\u2019s going to take a long while for things to get back to normal. For one thing, even those states that are opening up are placing strict social distancing provisions on businesses, ensuring that even if people wanted to start shopping and eating out again, they won\u2019t be able to do so like they were before. So with businesses slow to open, it\u2019s going to take many months before all those unemployed people are able to make it back to work. Even then, with some making more money on unemployment insurance than they were at their jobs, many businesses may find it hard to get their employees back.<\/p>\n
Then there\u2019s the fact that even with the economy opening back up, it was set to fall into recession anyway. With huge amounts of debt still outstanding, numerous corporations getting downgraded, and many companies having to file for bankruptcy, no one really knows who will be left standing once things open up again.<\/p>\n
The COVID-19 crisis has also led to a deterioration of relations with China, as Western anger at what has now been seen as China\u2019s deliberate attempt to mislead about the nature and seriousness of COVID-19 has led to accusations flying from all sides. There\u2019s every indication that China won\u2019t live up to the terms of the Phase One trade deal it signed with President Trump in January, in which case the US-China trade war will probably kick back in even worse than before.<\/p>\n
In short, there\u2019s really not a lot of reason for optimism in the economy today, which is why so many investors are flocking to gold. They learned their lesson from 2008, after seeing stock markets losing more than 50% of their value while gold tripled and silver quadrupled, and vowed not to make the same mistakes again. Due to developments since 2008, it\u2019s even easier to invest in gold than ever.<\/p>\n