Geopolitical, political, environmental and health crisis events tend not to last. Their immediate, beneficial effects on the price of gold tend not to last, either. However, when the events occur during climates already favorable for gold, they have the potential to trigger strong, sustained upward moves in precious metals. Recently, some experts suggest the new coronavirus could trigger a recession. This likely would favorably affect the price of gold and silver for some time.
Goldman Sachs analyst Jeffrey Currie recently penned a note to clients about this. He pointed out how unresolved Iran/U.S. tensions could have a ripple effect throughout the global economy. Currie concluded that the ripple effect ultimately could touch gold and send its price substantially higher.
A few days ago, Stephen Roach, former chairman of Morgan Stanley Asia, declared the coronavirus outbreak could cue similar behavior in the worldwide financial system. In CNBC’s “Trading Nation,” he said the health crisis fallout has the potential to effectively “shock” the global economy into a recession.
Retirement savers should study the potential for risks that could upset the global economic order. It’s especially important for those who have built large portfolios over decades. For these folks, it is particularly important to know how the dominoes can fall. If the coronavirus triggers a recession, they should study how it might affect economic – and portfolio – stability. For high-net-worth savers, this takes safe-haven assets such as gold and silver from “a good idea” to “essential.”
Savers “Cannot Dismiss This as a Non-Event”
Roach summarized how the coronavirus outbreak could wreak havoc on the global economy and even trigger a recession. He said, “Big shocks for weak economies that don’t have cushions to withstand them could lead to unexpected recessions.” It will be hard for a global economy withered by anemic growth to fight economic effects of a global pandemic.
Roach compared the coronavirus outbreak to the 2002–2003 severe acute respiratory syndrome (SARS) epidemic. He emphasized that the economic outcome could be far different in this case.
Roach pointed out that the SARs-related market disruption of 2003 did not last long. “Hopefully … this [also] will be a temporary disruption to the China and world economy,” he said. He hopes for a post-virus rebound in the second half of 2020, but notes that it may not happen. “With China and the world on a far weaker growth trajectory, this could be wishful thinking,” he admitted.
He added, “You can’t just dismiss this as a non-event in the context of [a worldwide economic slowdown].”
Coronavirus with Existing Threats “Makes a Strong Case for Gold”
Last week, Ayush Singh of global news site CCN.com also suggested a worldwide recession could be in the making. He noted the virus is just one more ingredient to what could be “a perfect recipe for a global meltdown.” Singh named declining worldwide economic output as a major antagonist to global economic stability. He also cited significantly overvalued markets, renewed likelihood of Brexit and rising geopolitical tensions. He said a global pandemic could prove to be the straw that breaks the camel’s back.
Singh goes a step further than Stephen Roach, though. He identifies gold as an antidote for the trouble so many are now predicting. “With coronavirus thrown into the mix, a disaster for the global markets looms large in 2020,” he writes. “This makes a strong case for gold, an asset that thrives during uncertainty.”
All savers need to be prepared to defend their portfolios during periods of economic turmoil. But preparation is even more important for those approaching actual retirement. These individuals likely have amassed not only a large portfolio but significant overall net worth. Folks with such a profile have the most to lose and the least amount of time to earn it back. Portfolio protection is not an option at that stage of life. It is essential.
Does this describe you? Are you worried the coronavirus could trigger a recession? If so, then it’s time to learn more about the role gold and silver can play in safeguarding your money. The best way to do that is reaching out to an industry leader in retirement savings protection. Award-winning Augusta Precious Metals stands ready to help.
New Retirement Protection Web Conference: Special Risks to Large Portfolios
When you call Augusta at 800-700-1008, you’ll speak with a customer success agent who’s well-versed in challenges to portfolio security. All of your questions will be answered patiently. You also will find out if you’re eligible to participate in Augusta’s complimentary Profit & Protect Web Conference. This unique one-on-one presentation is hosted by Augusta’s lead economic analyst Devlyn Steele.
The Profit & Protect Web Conference sets a new standard in retirement protection education. In just 30 minutes, Mr. Steele will explain how the big banks and Wall Street profit at your expense. He’ll also demonstrate how opening a gold IRA and applying other potent precious metals strategies can defend your hard-earned savings.
The stakes for retirement savers get higher with each passing day, and the stakes could get higher if the new coronavirus triggers a recession. A variety of potential global emergencies are mounting against the backdrop of a greatly weakened worldwide economic environment. Contact Augusta today to learn how physical precious metals can help shelter your portfolio from the brewing “perfect storm.”