Fox Business: Gold is Soaring Because It is a Very Good Hedge Against Currency Manipulation

Article by Jonathan Garber in Fox Business Channel

Gold has soared in recent weeks, and it is showing no signs of letting up anytime soon.

The precious metal was trading near $1,420 an ounce on Aug. 1 but had surged by more than eight percent to nearly $1,540 by Monday as the U.S. and China swapped blows in a trade war that seems to heats up, cools down, and heats up again each day.

“I think gold is a very good hedge against currency manipulation," Jeff Sica, Founder, President and Chief Investment Officer of Circle Squared Alternative Investments said today on "Varney & Co" airing on FOX Business, "The more the governments mess up, the more gold becomes attractive to me. I do not trust governments and the way they handle currency.”

The trade war is just one concern of central banks around the world, which have also been cutting interest rates to grapple with a slowing global economy.

The economies of the UK, France, Germany and Italy are teetering on the brink of recession, and China’s gross domestic product is growing at its slowest pace in 27 years.

And in the U.S., the yield curve earlier this month inverted for the first time since the financial crisis, stoking fears a recession may be on the horizon. Such an event has preceded the last seven recessions, spanning more than 50 years.

All of that is positive for gold, which is why UBS is raising its price target.

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