Hey Gotraders,
People and economies have placed value on gold, making it a commodity we rely on as an insurance policy against tough times.
The price of gold was around $1,700 an ounce a few weeks ago, and has since increased to about $1,900 amid signs of accelerating inflation and a potentially uneven economic recovery due to the resurgence of Covid-19 in some countries. Bank of America (BAC) thinks that the price of Gold could pass the $3,000 mark.
Let’s take a look at some of the reasons why Gold is considered a “safe haven” commodity.
Weakening U.S. Dollar 💵 When the US dollar starts to fall against other currencies and starts to lose its value, people tend to buy gold instead. This increases its demand and in turn its price.
Hedge against inflation & deflation 🛑 The topic of inflation is very relevant at the moment. The Central Bank has been printing money and keeping the financial system flushed with cash during the pandemic. The Federal Reserve has kept interest rates low and bought up Treasurys, in a bid to stimulate the Covid-hit economy and keep the financial markets afloat. The Consumer Price Index (which is used as a measure of inflation) showed that inflation in April accelerated at its fastest pace in more than 12 years as the U.S. economic recovery kicked into gear and energy prices jumped higher. Gold has historically been an excellent hedge against inflation because its price tends to rise when the cost of living increases.
Portfolio Diversification 💰 Gold usually has a negative correlation to stocks and other financial instruments. If stocks generally crash and aren’t doing well, chances are gold prices would be increasing.
Why is this important? There are several ways to invest in gold. You can buy physical gold, invest in gold mining companies, or you may choose to invest in an Exchange-Traded Fund (ETF). We have the SPDR Gold Trust ETF listed on Gotrade as Gold (GLD).
📈 Tesla stock is up over 7% in the last week 🆙
Stocks of Tesla (TSLA) reached highs of over $900 in the last 12 months. Their stock has been falling since January due to various reasons - supply chain disruptions, battery issues, backlash in China, as well as increasing competition. Well, good news for Tesla shareholders! Tesla stock recovered over 7% in the last week itself and currently trades at $625.22.
📈 Cathie Wood’s space exploration ETF dumps its remaining shares of Virgin Galactic 🗑️
Cathie Wood’s space exploration ETF (ARKX) has officially ZERO shares of Virgin Galactic (SPCE) at the moment. They held 672,000 shares of Virgin Galactic when the ETF first began trading in late March. Ark dumped nearly half its shareholding on April 20th, when shares of Virgin Galactic slipped below $23. They unloaded almost all the remaining stake in early May when the stock fell to about $15 and the remaining few shares were just unloaded.
Stocks of ARKX are up 1.95% over the last 5 days and closed at $20.39.
Top movers & shakers 🎢
What else is making headline news 📰
Bank of America (BAC), Citigroup (C), Wells Fargo (WFC) unveil their cryptocurrency policies.
Yum's (YUM) Pizza Hut set for big growth in Latin America, Iberia.
Apple’s (AAPL) massive success with CarPlay paves the way for automotive ambitions.
Popular companies releasing earnings this week 💰
Tuesday: Zoom (ZM), Scotiabank (BNS)
Wednesday: NetApp (NTAP), Advance Auto Parts (AAP), PVH (PVH), Ultimate Fighting Championship (EDR), C3AI (AI)
Thursday: Broadcom (AVGO), Crowdstrike (CRWD), Lululemon (LULU), Docusign (DOCU), Slack (WORK), Plug Power (PLUG), JM Smucker (SJM), Five Below (FIVE), Asana (ASAN), Manchester United (MANU)
A company’s market value may fluctuate considerably around the time that the earnings report is expected to be published. Stock prices may rise or fall according to analysts' speculative estimates, released prior to the actual earnings announcement.
The earnings season can be a time of great opportunity since better-than-expected figures could cause a company’s stock to greatly increase in value. Worse-than-expected results could have the opposite effect.
That’s all from us for now.
Signing out,
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The legal stuff 🤓
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