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U.S. Inflation hits 7%
With U.S. Inflation hitting 7%, will gold act as a hedge against soaring inflation over the next few years?
The price of goods and services in America is on a rollercoaster ride. The increases have been significant, with 7% them being more expensive this December than last year!
The Federal Reserve has finally stopped calling inflation “transitory.”
The US continues to see rising prices, with inflation jumping 7% in December, this is the seventh straight month where inflation has topped 5%.
Housing and car prices continue to rise, with significant contributions to this trend coming from used-car dealers. Fresh food and energy also experienced an increase in costs.
Will gold act as a hedge against soaring inflation?
As the U.S. economy continues to be under the spotlight and inflation begins to take root, gold bought today should reveal its worth in a few years.
While it might be considered an unusual investment for some, there is no doubt that it has been a worthwhile decision for many people.
In addition to gold’s other properties, such as being able to store value and be liquid, it is also a great hedge against inflation, which will help ensure its value in the future.
Gold mining companies are already seeing gains on their stock prices as investors realise that gold may continue to rise.
Global economic threats
The presence of all these global economic threats have simply made people more willing to invest in something tangible like gold rather than paper currencies, bonds or similar assets that can be devalued when inflation is high.
There has also been an increase in the amount of gold being bought by countries such as China and India, who are trying to protect their wealth from inflation and currency fluctuations.
Having a portion of your assets in gold could help protect your wealth during times of inflation
While there can be some fluctuations in the market, should you buy gold at today’s prices, it is potentially likely that you will see a great return on your investment in a few years if inflation rates continue to rise the manner they are currently.
Gold has been a hedge against inflation, and with the world economy in such a state, now might be the time to buy.
Main image by frycyk01 on Pixabay.