Over the last year, we’ve talked a lot about geopolitical risk. Could turmoil around the world now be the new normal?
Some analysts think so.
The focus has primarily been on tensions between the US and North Korea in recent months. But there have been plenty of other risk factors popping up around the world, including ongoing uncertainty about Brexit, the secession movement in Catalonia, continued fighting in the Middle East, terror attacks, tensions between the US and Russia, various elections, a coup in Zimbabwe, and more. On top of that, outside of the US, a lot of people think Americans should be looking at the geopolitical risks right here at home due to political divisions and uncertainty in Washington D. C.
Historically, geopolitical turmoil is good for the yellow metal. Investors buy gold as a hedge to protect themselves against such risk. But safe-haven buying tends to ebb and flow with the tides of uncertainty. Events spur panic for a period of time and then things return to normal. But some analysts now believe geopolitical uncertainty may be the new normal.
This post was published at Schiffgold on NOVEMBER 20, 2017.