Since March - April of 2024, globally the financial markets have seen extreme increase and decrease in rate of volatility (as measured by financial market volatility index - VIX), like it happened in mid-April or in early August. Even during these periods Gold held steady.
Also not to mention that Gold has been mostly trading above $2,500 per Oz during this period since March -April 2024.
To be sure, while Gold has been strong, staying above the milestone of $,2500 per Oz, if there is a major event like a financial crises, or a global recession, or a sudden surge/spike in inflation, or higher interest rates staying higher for longer than anticipated - under all these circumstances financial markets will be impacted not mildly but significantly with dire consequences in the aftermath. Gold however will be mildly impacted, and might go below $2,500 per Oz, or in a worst case scenario all the way down to $2,000 per Oz which is a 20% drop consistent with past US recessions like in 2008 or 2000-2001.
However the good news is if Gold investors can ride this period without panicking, Gold has potential to be a multi-bagger - go 5x-6x higher in the aftermath of this financial event. Between 2001 to 2011 in aftermath of 2000-2001 recession - Gold went up from $250 (yes two hundred and fifty only) per Oz in 2001 to $1,950 per Oz in 2011 - a 9x-10x multi-bagger in just one decade.
No comments:
Post a Comment