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With Inflationary pressures mounting, consider gold as a strategic asset

04-20-2021 5:14 AM By Blair Harris

With inflation pressures mounting, consider gold as a strategic asset

“Kiplinger’s latest forecast on inflation,” author David Payne states, “Gas prices had risen 31% over the four months from December to March, and Core inflation, which excludes the costs of food and energy, will run at about 2.3% in 2021, up from 1.6% at the end of 2020.”

 

Some of our customers have commented they are experiencing significantly higher prices at the cash register and are adding gold to their portfolio as a strategic hedge against pending inflation. This could prove to be a wise decision.

 

According to the World Gold Council, “Gold has long been considered a hedge against inflation and the data confirms this. The average annual return of 11% in US dollars over the past 50 years, has outpaced the US and world consumer price indices (CPI).” Further, “In years when inflation was higher than 3%, gold’s price increased 15% on average.”  


If you are concerned with inflation, market corrections amid already high equity valuations, budget deficits,  or other environmental factors which may adversely impact your personal investment portfolio, it may be time to acquire some gold.


Sources:

World Gold Council, Gold Hub (2021 February 16) “The relevance of gold as a strategic asset”. Retrieved from: https://www.gold.org/goldhub/research/relevance-of-gold-as-a-strategic-asset-2021


Payne, D (2021 April 14) “Inflation Should Ease Temporarily in April”. Retrieved from: https://www.kiplinger.com/economic-forecasts/inflation#:~:text=Expect%20overall%20prices%20to%20rise,2021%20as%20the%20pandemic%20recedes.&text=Core%20inflation%2C%20which%20excludes%20the,at%20the%20end%20of%202020.


Image: Will O., Unsplash

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