“It’s a great time to be looking at gold for a hedge.”– Joe Elkjer, Precious Metals Advisor
The endless barrage of soaring inflation, skyrocketing living costs, constant supply chain delays, and other economic issues is pushing more and more investors toward gold. Retail investors, institutions, and central banks are relying on the wealth protection offered by gold to weather the storm for the foreseeable future.
However, this recent move to gold has left many investors with questions about how to most effectively use gold as economic circumstances worsen. Watch the video to hear what Sr. Precious Metals Advisors Steve Rand and Joe Elkjer recommend for investors during these uncertain times.
Things are bad…but not that bad.
A common instinct among new gold and silver investors is to use these precious metals as an alternative to fiat currency. The thought process is that purchasing goods and services with a more secure asset when compared to USD will provide more buying power and stability.
While this line of thinking makes sense at first blush, the economic situation isn’t that bad yet. There is an imaginable scenario in which using gold as a method of exchange would make sense, but that’s not the most effective way to hedge against inflation right now.
How gold reacts to rising inflation.
The most probable outcome is that gold and silver prices move upward as inflation and living costs increase. This relationship has been demonstrated time and time again over the centuries. We only have to look back at the two most recent periods of inflation in the 1980s and 2010s to see how precious metal values soared as the economy fell.
The effective way to use gold during economic instability is to take advantage of this phenomenon. Buying gold before it breaks out to new highs allows you to sell at a higher value in the future. Those gains can help offset the increased living costs resulting from inflation. It’s all about protecting the value of your wealth through the inevitable economic ups and downs.
History is rhyming.
“History Doesn’t Repeat Itself, but It Often Rhymes”– Mark Twain
Economic events never repeat themselves, although they often rhyme. If the economy’s previous experiences with traumatic levels of inflation have taught us anything, it’s that higher inflation translates into larger gains in gold and silver prices. Experts are expecting a big boom in gold prices based on what we’re currently experiencing in terms of inflation.
A new Consumer Price Index report was just released revealing that inflation jumped a shocking 9.1% in June. The average American is reeling from the effects at the pump, the supermarket, the big box store, and everywhere in between. The historical analysis would suggest that it’s only a matter of time before the seesaw dynamic pushes gold prices to higher levels.
Buy Gold & Wait, Don’t Wait to Buy Gold
The undulations in the economy are unavoidable, but that doesn’t mean the tops and bottoms are predictable. It’s impossible to time the market correctly which is why smart investors simply buy gold and wait instead of waiting to buy gold.
Fortunately, now is a fantastic opportunity to diversify your portfolio or scoop up some more gold. Take advantage of the US dollar’s temporary strength to get more bang for your buck. You can get a FREE COPY of our popular Precious Metals Investment Guide to get started in the right direction.