Gold will probably be one of the few assets that will benefit from political and economic shocks in the USA and around the globe. Washington is seeing a budget deficit. According to HSBC, potentially, this may result in higher gold production this fall when the price is expected to hit $1900/oz.
The current economic instability and multiple political risks attended by uncertainty in advance of the US presidential elections (scheduled for November) are bullish factors for the price of gold.
The experts anticipate a gold rally even despite the current decline amid higher production and lower demand.
HSBC experts recommend betting on gold as this will be a safe haven assets for those investors who will be concerned by the destiny of the US Dollar and the common Euro currency.
According to , there are several more factors to consider. In particular, the eurozone crisis and the escalating budget crisis in the USA, which will reach its climax in late 2012, may result in a major economic decline.
Traditionally, gold is viewed by most investors as a safe haven asset. However, the precious metal has failed to be such an asset since the beginning of 2012. Since September 2011, when gold reached the all-time record at $1920/oz, the price has dropped by more than $300/oz down to $1600/oz and lower.
