Gold: Solid Hedge Against Inflation

The start of a new year is an excellent opportunity to assess your assets – what’s performing, what’s not, and where you could put your money to save and grow wealth for the future.

Precious metals, such as gold and silver, are shaping themselves as safe havens for traders in the next year in the face of sustained rising inflation and the most challenging year for markets since 2008.

Gold and silver saw increases, surpassing the three major U.S. stock indexes, and are frequently seen as recession-and-inflation-proof. Last year, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite ended in negative territory.

David Russell, vice president of market intelligence at TradeStation, stated in an interview with Fox Business that gold and silver are go-to commodities when traders are pessimistic about equities and the economy.

He stated commodities are also traditional hedges against the type of inflation we have witnessed over the past year. Currently, precious metals are appealing because many investors believe equities are overvalued and regard gold and silver as alternative investments.

Both metals might profit from a recession and the Fed’s decision to stop raising interest rates.

Projection For 2023

According to an online survey by Kitco News, the price of silver might increase by more than 50 percent to $38 per ounce in 2023, while gold could hit a record $2,100 per ounce.

Russell said silver frequently follows gold; thus, its value might rise during difficult times.

Comex silver for January delivery rose 0.83 percent to $24.059 per troy ounce on Tuesday. The Comex gold price increased by 1.10 percent to $1839.70 a troy ounce.

Silver’s position as a precious metal is a mixed bag for investors, according to Russell, who noted the metal has industrial applications and can be extremely volatile.

In an expansively bearish market, silver’s status as an industrial metal could be problematic for investors. Gold will continue to be the most vital asset to monitor since silver is unlikely to climb without assistance from gold.

During positive cycles, he determined silver often outperforms gold; although gold would also gain.

Invest in Gold

There are a lot of upsides to investing in gold. Gold is useful for hedging against inflation and maintaining its value over time, so it may help diversify a portfolio. Since its value tends to be stable compared to other asset classes, investing in it is seen as a safe bet.

Nonetheless, it is not without flaws. Gold is not a good investment if you’re looking to get rich quickly or bolster your retirement funds over the long run because it does not provide large returns.

Yet, gold might be the best choice if you’re seeking a safe and reliable investment.

If you’re unsure how to start investing in gold, an expert can help point you in the right direction. They can lay out the pros and cons of investing in gold in detail and ensure that it is a good fit for your portfolio.

This article appeared in The Political Globe and has been published here with permission.