Gold has been on the rise, reaching new all-time highs in mid-March, and experts are attributing this increase to economic worries and hedging tactics. The global political and economic environment has raised concerns among investors, leading them to turn to gold as a safe investment tool. But what does the future hold for gold prices? And what about silver, which has also gained popularity recently?
Financial expert Li Zirong believes that the over-issuance of currency during the pandemic has led to inflation, sparking interest in gold. The United States alone has printed approximately $8 trillion since the start of the COVID-19 pandemic, leading to a devaluation of money. While hyperinflation hasn’t occurred yet, there is a real risk if the U.S. government continues to print money without restraint. Li compares the current situation to the inflation of the late 1920s and early 1930s, warning that the U.S. national debt, which currently stands at $34 trillion, is unsustainable. In such a scenario, gold becomes the safest financial tool for hedging against risks.
Shi Shan, an expert on China issues, explains that the price of gold and the U.S. dollar usually move in opposite directions. As the U.S. dollar strengthens, the price of gold tends to decrease. Currently, the U.S. Dollar Index is at its strongest level in a decade, raising questions about whether it will continue to strengthen or decline. Inflation rebounded in February instead of falling, leaving uncertainty about its future trend. The second half of the year will be crucial for U.S. interest rates, as many predict they will start to come down to control inflation. However, the election year may put pressure on the U.S. government to keep interest rates low for favorable economic data.
Geopolitical risks also play a significant role in the rise of gold prices. Guo Jun, president of the Hong Kong edition of The Epoch Times, points out that geopolitical crises around the world, involving nuclear-armed countries, are pushing global funds away from U.S. dollar assets and towards gold. The uncertain outlook of the U.S. economy and the unstable U.S. dollar make gold a preferred choice in such situations.
As for silver, experts believe it is also poised for a significant rise in prices. Li predicts that the demand for silver will greatly increase in the future, especially with the boom in new energy sources such as batteries, solar cells, and solar panels. These industries require a significant amount of silver due to its outstanding electrical conductivity. However, the supply of silver may not keep up with the demand. Mexico, the largest silver-producing country, is predicted to deplete its silver reserves by the end of 2025. This depletion, along with the increased demand, will likely lead to a sharp rise in silver prices.
Overall, gold’s rise can be attributed to economic worries and hedging tactics, while silver’s potential surge is due to supply concerns and increased demand from various industries. Investors are turning to these precious metals as a safe haven in uncertain times. As economic and geopolitical risks persist, it’s no wonder that experts predict a bright future for gold and silver prices.
