Gold and Inflation – What’s to Come?

It’s no big secret that with inflation typically comes an increase in the price of gold. Gold has been seen as a safe haven for investors for many years. Because of this, investors buy gold during times of inflation to help preserve their wealth. Therefore, demand goes up, and typically so does the price of gold per ounce.

Let’s go beyond what’s considered to be common investment knowledge and look at some real research from the World Gold Council – a trusted authority on gold worldwide.

An extremely informative report flew under the radar to many investors back in February of 2010. This report titled, Linking Global Money Supply to Gold and to Future Inflation – had some very interesting takeaways. Those looking to invest in precious metals should understand, “Gold exhibits a strong negative correlation to the dollar. Gold can also be shown to outperform other assets such as stocks and bonds in times when inflation is on the rise.” This is exactly what makes gold so unique. It doesn’t play by the same rules as stocks and mutual funds do.

We are in a time of volatility. In 2002 you may have been able to trust the stock market and/or housing markets. Now, 10 years later, the rules have changed. Fortunately, gold has had an amazing track record through these volatile times and has every reason to continue to perform well into the future. Interestingly enough, research suggests inflation may be the key to this precious metal’s success.

Specifically, the analysis of this report suggests that, “a 1% change in money supply in the United States six month[s] ago produces, on average, a 0.9% increase in the price of gold today, assuming the money supply in the other regions does not change.”  This is why research is done. Having everyday investment knowledge is one thing, but hard data and statistics are another.

It’s time to face facts. Do you think inflation in the US will ever turn into deflation? Will our banking systems actually get their acts together? When will our government get a hold on our skyrocketing national deficit? As inflation continues to climb and climb, when will you take a stand against it and protect your wealth?

We urge you to contact us here at American Bullion today. Protect yourself against inflation by purchasing hard, physical gold and silver. With inflation on the rise and even talks of another round of Quantitative Easing, it seems that gold has no choice but to continue its upward trend.

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American Bullion specializes in adding gold and silver to retirement accounts. If you have a question or would like to know more about your investment options, please call American Bullion at 1-800-326-9598 to speak with a precious metals specialist.