Afternoon everyone....
Yesterday I did a post “Is silver a good investment”. In it I explained and proved how it was both an investment and a hedge against inflation.
So today it’s golds turn....
In case you didn’t know gold and silver have been money since the beginning of time. Every kingdom held their wealth in gold, used it to purchase other goods worldwide.
But is gold an investment ???
I am going to prove just like I did with silver that gold is both an investment, a hedge against inflation, and a store of wealth.
I am going to use the closing gold price of each year to remain consistent. Starting off with the gold closing price on December 31, 2018 which was $1278.30. The closing price of gold on December 31, 2019 was $1519.50. That’s an increase of 18.87%. The closing price of gold on December 31,2020 was $1893.66. Which is an increase of 24.62% over the previous year.
This proves that gold is more than a hedge against inflation.
To prove that here are the inflation numbers for the same three years. In 2018 the inflation rate was 2.44%, in 2019 the inflation rate was 1.81%. And the estimated inflation rate for 2020 is said to be 1.47%.
So gold increased 18.87% and inflation was down from 2.44% to 1.81% during the same time frame. The following year inflation was 1.47% which is down from the 1.81% the previous year while gold was up 24.62%.
That’s a 17.06% difference the first year and a 23.15% difference the second year.
So obviously gold is an investment, a hedge against inflation and a store of ones wealth. Not only that but you can hold it in your hand.