Once again, it appears the federal government has avoided defaulting on its national debt. It’s interesting to note as the possibility of default was growing, discussions turned to which asset might be best to own to minimize the effect. From regular retirement savers to professional asset managers, and even global systemically important banks, one answer seem to come up more than any other: gold.
Why Gold Makes Sense During Economic Uncertainty
Economic uncertainty means you have to keep up with what’s happening. Make sure you bookmark this page and we’ll keep you in the know. At the beginning of the year, the prospect of default was still very remote. Yet, even J.P. Morgan was thinking about the possible consequences and how to prepare for them.
At the time, Morgan said that diversification is the best defense. Just two weeks ago, J.P. Morgan declared that hedging would be key and went on to cite gold as an asset they believe could provide that benefit. Precious metals such as gold could provide some protection.
Another global investment bank, RBC Capital Markets, also came out in support of gold as an asset that could help mitigate possible default consequences. Recently, RBC analysts publicly shared that assessment saying, “In the near term, we believe gold looks like the best hedge,” and it’s not just investment banks that have concluded that gold is one of the best places to be in the event of a default.
Suggested Reading: How to Invest in Gold
Bloomberg asked professional asset managers and retail savers this question, what will you buy if the US hits the debt ceiling? By a wide margin, each category of survey respondent answered “gold”. Commenting on the survey results in opinion piece in the Financial Times had this to say, “Even if a default is averted, it is worth noting the answers.” Thankfully, it appears a default has been averted. As far as taking note of the answers, the Financial Times may have a point.
For one thing, passage of an agreement to suspend the debt ceiling for two years means this situation will have to be addressed again by Congress no later than early 2025. Also, it remains to be seen how much the new debt ceiling agreement improves America’s long-term fiscal outlook.
Even the Treasury Department recently referred to America’s long-term fiscal outlook as unsustainable. For these reasons and more, learning about gold might be something you want to look into. That’s why I suggest you take the time to learn more about what’s really going on in the economy by attending an exclusive web conference with Augusta Precious Metals. They have by far the best education in the entire space, and you’ll get a free education, whether you decide to invest in gold, or not.