Here’s why the largest U.S. bank is bullish on gold prices

  • The unprecedented monetary and fiscal measures will lead towards the currency debasement, warns JPMorgan
  • The yellow metal is likely to benefit from this process, as well as the Japanese yen

Following the month when the largest monetary and fiscal packages in history were unveiled, the U.S. banking giant JPMorgan Chase & Co believes there’s only one winner going forward, and that’s gold prices.

Fundamental analysis: Currency debasement coming

In the latest report published by JPMorgan, the bank’s analysts John Normand and Federico Manicardi believe that there is an increased risk of the currency debasement in the coming years after the unprecedented monetary and fiscal measures announced globally to tackle the consequences of the COVID-19 outbreak. 

Debasement refers to the process where the value of a currency is decreased. By lowering the value of money, governments believe they would have more funds to finance different projects and processes.

Analysts believe that the combination of massive fiscal and monetary stimulus is highly likely to initiate the process of currency debasement and the winner will be gold prices. 

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