Why The U.S Trade War is Good news for Gold

As the gold price Australia continues to rise Cash for Gold businesses have been booming. Judging by what is going on in the world, it might not be abating anytime soon. There is a global trade war between America and by the look of things, the rest of the world. The UK is also caught in its own Brexit quagmire.

We balked when U.S President announced his 25 percent tariff on $50 billion of Chinese goods and watched on with confusion as President Trump marched off the Group of 7 summit after a spat with Canadian leader, Justin Trudeau. The trade policy extended to Europe and they responded in kind.

The economic impact

With inflation on the rise a trade war could hurt an already fragile economy. Retaliatory tariffs could hurt major industries like farm products, energy and automobiles. This means the Chinese could look at other sources for products like soy, automobiles or crude oil in places other than the U.S. The consequences of a trade war will affect the entire globe. The focus has been on U.S because it holds the biggest global economy. Everyone will feel the aftermath of the trade war. This might be the best time to protect your money and invest it in precious metals like gold before the gold price Australia rises.

What kind of effect will this trade war have on the markets?

According to some economic experts, a trade war like this would lead to job losses and send the economy into a recession. The markets would also plummet and currencies will be hit hard. On the Tuesday following Trump’s announcement of new tariffs for Chinese goods, the stock market plummeted. It was the worst level that the Dow had been that month.

Tariffs have always been bad for the economy. The Great depression was triggered by the 1930 Smoot-Hawley tariff act. When President Bush levied steel imports in 2002, equities market went down for eight months. It took two years for them to fully recover. Historically, when the stock market gets bullish as it has been in recent times, gold prices go up as investors hedge their money in gold and other precious metals.

The economic consequences of a trade war will not be immediate. It may take months for things to unfold but there is already a sense of panic in the markets. It won’t be long before the gold price starts climbing. The best time for buying gold is now, before the gold price Australia goes up more than it already has.

You don’t have to rush down to your local cash for gold shop and start buying gold bullion or gold coins if you can’t afford to. Start getting the small things. Buy as much gold jewellery you can. Not only can you enjoy your jewellery you can also turn a tidy profit later on when you sell it back for cash, which will come in handy in tough economic times. As things stand now, the only sure thing you can rely on is that the world is not the same anymore. This constant turmoil might be a bad thing for the economy, but there is one thing that will come up tops – Gold.

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