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Analyzing Gold Futures During Market Uncertainty

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Thanks to the effects of the past few months, there has been a lot of uncertainty in the market.

For one, we have the Electoral College, which is in the process of certifying election results but is still being challenged. While the consensus seems to be sinking in, some still question the legitimacy of the past elections.

Housing Markets Crack

There is also the more significant problem: a shaky housing market. Many have been without jobs for months, and landlords could soon kick people out of their homes. It is a known fact that millions around the country have been defaulting on their mortgage payments. If this trend continues over the next few months, it could have a ripple effect that will affect the entire housing market and possibly force a collapse.

The housing market remains one of the most interconnected markets in the American economy. As seen in the 2008 crisis, a breakdown of this market could very well lead to a widespread economic meltdown that will spill over to several other industries.

Now that people aren’t making their mortgage payments, we’re beginning to see the possible foundations of another housing crisis. Unlike in 2008, the government might not be in the best position to bail the economy out anymore since it already spent trillions on coronavirus relief.

Gold as a Hedge

With all this uncertainty, many investors have been running towards alternative assets. For now, the most popular of these assets is gold. Over the past few decades, gold has always served as a hedge against inflation.

The Federal Reserve already announced that it would allow inflation to rise. In that case, gold futures and other gold-related assets provide a perfect safe haven.

Of course, anything can still happen. The year 2021 brings a lot of promise with it, especially with the economy looking to bounce back from the coronavirus’s effects and everything trying to land on their feet. Still, with so much uncertainty, it’s worth analyzing gold futures and keeping an eye on the reserve asset if you’re looking to offset some of your risks and protect your holdings.

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