As the global economy appears to be teetering on the brink of a recession, investments expert Adrian Day is warning that prospects for a soft landing won’t be realized. Instead, Day believes that investors should look to gold as a safe-haven in anticipation of a coming recession.
Day has made a career out of effectively managing large capital investments, and as a result, he has become a respected adviser among investors. At the start of 2019, Day boldly predicted a coming recession in 2020; however, these predictions were scaled back as the global economy seemed to be weathering the storm.
“Until recently, despite the weaker global growth and many warning signs, the actions of the Trump administration, such as the trade war and other policies, had seemed to be holding the US economy up,” said Day.
Unfortunately, the economic uncertainty triggered by the COVID-19 pandemic has further exacerbated concerns about a coming recession. To prepare for the potential economic downturn, Day is advising investors to look to gold.
“Gold will be the go-to asset,” said Day. “Given the damage being done to the global economy, the natural and historical safe-haven in troubled times.”
Day believes that in a recession, central banks will be cutting interest rates to zero, and even below to stimulate action economies. This could hurt the value of paper assets, such as stocks and bonds, as investors sell off their holdings. As such, gold should attract more attention and become more valuable in comparison.
Day advises investors to use this time to purchase gold, as it could potentially rise dramatically in value during a recession. Although he concedes that timing is key, it’s difficult accuracy predict the exact moment at which gold’s value will peak. Thus, he suggests that investors stay alert and keep an eye on the markets.
“Gold has always been the best overall way to maintain purchasing power in a recession,” said Day. “[It’s] best to take advantage of lower gold prices now and add gradually, as prices are still quite depressed.”
