Investment News: Gold to Benefit as US-China Relations Face Turbulence
Article by Dean Belder in Investment News
The stage is being set for intense trade talks between the US and China. Is this the moment China has been stockpiling gold for?
Robert Sinn, senior content creator at Goldfinger Capital, examined the current macroeconomic situation and the role he expects gold to play in it.
Highlighting how China's strong gold buying has supported the yellow metal's price, he also spoke about how Donald Trump's return to the White House could impact relations with the Asian nation.
“It’s actually the most overvalued it’s been since 1985, so this is like a 40 year high in terms of its valuation. You can go back to 1985 and what happened shortly after — it got super overvalued and hit up a red-light level. It fell very sharply because of what they did in Manhattan at the Plaza Hotel,” Sinn said.
Sinn suggested that something similar may be about to occur, leading to considerable uncertainty. The US is further challenged by a massive $2 trillion deficit and $7 trillion worth of debt that needs refinancing in 2025.
However, he expects the US to extend the 2017 tax cuts made under Trump. This will require the US to commit to more deficit spending, and Sinn sees a ......