The First $2,000 Gold Price was in the Early Days of Covid-19
For only the second time in history the price of gold has spiked to exceed the historical barrier of $2,000 for two days in a row. Precious metals are typically viewed as safe haven assets during times of turmoil against inflation along with geopolitical events creating a space many investors run to in times of uncertainty. The news of recent events has caused gold to spike over $2,000 and silver to spike over $25, with the current prices at the time of writing sitting at $2,053.80 for gold and $26.58 for silver.
The only other time the price of gold spiked for a day over the $2,000 barrier occurred in the early days of the Covid-19 pandemic as positive cases spread internationally. As tensions continue to rise in the Russian-Ukrainian conflict along with the U.S. and Europe considering banning Russian oil imports, the global market is experiencing growing impacts which are reflected in the current gold price. The steadily growing gold price may not be coming down anytime soon because, according to a CNN Business Live News article, “as long as oil prices continue to skyrocket, gold and other commodities may go along for the ride.”
In the near terms, the recent news in the financial markets is inflation. In January, the Bureau of Labor Statistics reported a Year Over Year inflation of 7.5%. Many consumers are seeing higher prices across the board year over year including costs such as: Heating oil is up 103%, wheat is up 98%, crude oil is up 81%, natural gas is up 78%, coffee is up 73%, and the list goes on.
It is important to note that inflation lasted for 9 years in the 1960s and 5 years in the 1970s. If we are to see a similar trend today, investors need to consider their asset allocations and may want to make an allocation towards precious metals. 5 years of 7.5% inflation will erode 32% of an investor’s assets, if holding U.S. Dollars, and 9 years of 7.5% inflation will erode 50% of an investor’s assets, if holding U.S. Dollars.
As geopolitical events continue to occur, and the price of gold sees more movement, precious metals remain a good hedge against the instability seen in the market today. If you have waited for the right time to invest, or waited for the moment to invest further, now may be the time to grow your portfolios. Take advantage of the spiking gold prices today.
The Importance of Investing in Physical Gold
We are currently witnessing uncertainty in the global market, economy, and geopolitical fronts which leads people to search for ways to protect their wealth and further develop their investment strategies. Physical gold provides stability among the volatility of the stock markets during times of extreme highs and lows. As time goes on, the demand for gold has only grown and historically remains stable during inflationary times. When the world experiences unrest, economically, or politically, gold can offer a low-risk and high-reward investment option for those searching for a hedge against inflation.
