A Safe-Haven in Times of Chaos, Confusion and Uncertainty 

By Mark Ferguson, The global economy has quickly plunged into chaos, confusion and uncertainty after President Trump imposed high trade tariffs this week on goods coming into the United States, calling it “Liberation Day.” As you most likely know, stock markets around the world fell precipitously the next day, leaving businesses, governments and charities in a serious state of uncertainty. Economists raised the chances for a recession to more likely than not, while governments around the world threatened to retaliate. 

It’s a global trade war and it’s real! Talking heads on TV are using words to describe the situation like “historic,” “unprecedented” and “disastrous.” 

The day after Trump announced the tariffs, prices for gold and silver bullion fell along with stocks, due to profit taking, but by midday, price support for gold was found above $3,100/ounce. On the previous day, its price closed at an all-time record high close at $3,133.70. This leads up to why gold and silver are considered “safe-haven” investments. 

A safe-haven investment performs differently and contradictory to traditional investments like stocks. A safe-haven investment holds its value, or even increases, when other investments fall. Safe-haven investments provide protection for the value of an investment portfolio through diversification. 

While stocks profit from business success and can spin off income, gold has an entirely different purpose for owning it. Gold is a store of value that protects your investments from loss of purchasing power. The price of gold increases when the value of the dollar falls, and gold offers protection from inflation. 

For example, as the rate of inflation increased last year, the price of gold rose from $2,285.90 a year ago to a high close this year at $3,133.70, reached this week. Just this year, amid economic chaos, confusion and uncertainty, gold has soared almost exactly $400/ounce, so far. Silver has performed similarly, from a low of $26.26/ounce to a high of $34.82/ounce during the past year. 

A number of experts from around the world who write, lecture and advise about precious metals forecast the price of gold to reach between $5,000 and $10,000 per ounce during the next few years. And they expect the price of silver to peak somewhere between $250 and $500 per ounce during the same period. 

Below is a Federal Reserve Economic Data chart showing our rapidly growing Federal debt. This debt is a prime driver of inflation, mirroring the decline in purchasing power of the dollar. It’s the fundamental reason individuals want to own gold and silver. 

Many investment advisors recommend diversifying about 10% to 15% of an individual’s investment portfolio into precious metals…gold and silver. Again, this represents a diversification into an alternative, safe-haven investment that’s designed to balance or serve as a portfolio “hedge” to protect against market turbulence in traditional investments. 

If you’d like to discuss how to purchase and own precious metals, feel free to call me anytime at 920-233-6777. Thank you.