A Growing Threat to the Global Economy

A rapid rise in COVID-19 cases is threatening economic growth in the United States and around the globe. As winter approaches and the number of cases hits new highs it appears inevitable that sectors of the U.S. economy, particularly restaurants and leisure destinations, will again be forced to close in many regions in an effort to curb the spread of the virus that causes COVID-19.

Diversify your portfolio with gold.

A safehaven during uncertainty.

New unemployment claims jumped during the week ended November 14, ending a four-week streak of declines that reflected improved hiring conditions.

As they departed for Thanksgiving recess, Republicans and Democrats in Congress remained unable to compromise on a fiscal stimulus bill that could prop up the economy in the face of COVID-19 shutdowns.

Overseas, the situation was no better, with the United Kingdom, Germany, France, and Australia among the major economies placing new restrictions on business activity. “While global economic activity has picked up since June, there are signs that the recovery may be losing momentum, and the crisis is likely to leave deep, unequal scars,” the International Monetary Fund reported on November 19. “Uncertainty and risks are exceptionally high.”

The Group of 20 nations acknowledged the growing economic clouds, warning that the global rebound is “uneven, highly uncertain, and subject to elevated downside risk.”

The international organizations are asking monetary and fiscal officials to continue providing support for their economies. In the U.S., it is almost a certainty that Federal Reserve monetary supply will remain extremely accommodative and that interest rates will remain low. That policy position, along with the uncertain economic outlook, presents a positive backdrop for the price of gold.

Diversify your portfolio with gold.

A safehaven during uncertainty.