Buying Gold: The Old But New Hedge Against Everything
As the United States is coming off peak inflation as the Federal Reserve seems to be on a mission to continue raising interest rates, possibly grinding the economy to a halt, other countries are on an upswing.
Take the United Kingdom, for example, some are projecting 18% inflation by 2023. That is a staggering number for any country, but especially gruesome for the United Kingdom. China is experiencing a real estate crisis that could become a worldwide financial issue affecting countries worldwide. Let us not forget the Russian invasion of Ukraine, which seems to not have an end in sight, as this war continues to linger even though it has been fading from the headlines.
So, while we have all this going on, gold seems to be just languishing in a trading range waiting for something.
When gold waits like this, even while all signs point to higher prices, we are of the opinion that the next “shoe” to drop is just around the corner. What that “shoe” is, that is up to speculation, but the market is preparing for a move.
Gold has been considered the “hedge against everything asset” and over time has proven its nickname. Look at the staggering pace that the US dollar’s real purchasing power continues to collapse and the price the gold continues to rise.
Kitco News did a great interview with two analysts from Northstar & Badcharts discussing the price target for gold. Embedded below is a video clip where they talk about gold. Are we in a sweet spot now to take on positions?
As an investment vehicle, gold has been used successfully for millennia and with zero counter-party risk, gold may be the best long-term option to act as a reliable store of value and protector of wealth. At some point, likely sooner rather than later, its price will reflect its importance.
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