The U.S. central bank, arguably the most powerful financial institution on Earth, has more than $5.3 trillion of assets on its books — the equivalent of roughly a quarter of annual U.S. economic output before the crisis.
“With central banks unleashing a tsunami of quantitative easing (QE) at a time when fear is running rampant in markets and (as) government debts are about to explode, it seems like the perfect cocktail that could push gold back to record highs.”
Oil prices fell on Monday, with U.S. prices briefly dropping below $20 a barrel and international benchmark prices for Brent oil falling to an 18-year low.
“The historic rally is not quite over,” Goldman Sachs said, adding that in a further equity drawdown, there could be another 3%-5% upside to the trade-weighted dollar from recent highs.
“It’s tough to be a buyer of any markets at all in these conditions, and with the ultimate ramifications of the COVID-19 outbreak still so uncertain.”
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