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Inflation Hedge

Inflation Hedge (Gold Investing · Why choose gold investing?) — "Because gold is naturally rare, people often invest in bullion bars, coins or gold ETFs when c…

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  • Gold investing as a potential hedge against inflation
  • Gold is naturally rare
  • Sharp increases in consumer prices reduce the purchasing power of cash savings
  • People often invest in gold when inflation threatens cash savings
  • Common investment vehicles include bullion bars, coins, and gold ETFs
  • Gold has worked best as an inflation hedge when interest rates lag behind inflation
  • Gold investment prices rose 20-fold in the 1970s
  • Gold prices fell in the 1980s when interest rates were raised above inflation
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Inflation Hedge

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Gold Investing

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"Because gold is naturally rare, people often invest in bullion bars, coins or gold ETFs when consumer prices rise sharply, hitting the purchasing power of cash savings. Gold's role as an 'inflation hedge' has worked best when interest rates lag behind the pace of inflation. Gold investing prices rose 20-fold in the 1970s but fell again in the 1980s when interest rates were then hiked above inflation."

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