With the risk of a U.S. federal government debt default rising and the probability of a U.S. recession rising, gold has once again become a safe-haven darling.
According to data provided by Bloomberg News in the United States, international gold prices have risen sharply recently. Although they have fallen back in the past week, gold prices have risen 11% so far this year, up 25% from the low in November last year.
According to the forecast of the US Business Insider website on the 14th, if the US government really defaults on its debt, the price of gold may reach a new high.
Edward Moya, senior market analyst at Anda & Co. said: “I wouldn’t be surprised if gold (an ounce) goes up another $100 … This is obviously a historic moment that could crash Wall Street broadly.”
Right now, the negotiations between the Democratic and Republican parties around raising the debt ceiling in the United States have made little progress. U.S. Treasury Secretary Janet Yellen warned on May 1 that the U.S. could default on its debt as early as June 1 if Congress does not take early action to raise the debt ceiling.
Nobel laureate Paul Krugman then said that the possibility of a US debt default was quite real. He also called for the removal of the debt ceiling.
“Even assuming an agreement to raise the debt ceiling is reached, we cannot ignore the potential heightened anxiety in the financial community as the deadline looms,” RBC Capital Markets analyst Christopher Lunay wrote in a research report released on the 12th. Sentiment. In this case, gold looks like one of the few assets that can attract money from financial markets.”
At the same time, investors bought gold, also aiming at a possible recession in the United States. Although important indicators such as inflation seem to be “fever”, some investors believe that the US Federal Reserve has raised interest rates by 500 basis points in the past year, and the impact on the US economy has just begun to show.
Michael Arone, chief investment strategist at State Street Global Advisors, told Reuters on the 12th: “The U.S. economy may fall into a recession at some point in the next 12 months.”
