When investing their money, most investors turn first to real estate or savings plans. These traditional investments remain the priority for individuals; however, they are increasingly challenged by alternative investments, where the return/risk ratio can be a source of opportunities. This is particularly the gold case.
The precious metal has been able to regain its attractiveness in recent years, particularly in 2020 when, operating in a countercyclical manner with share prices, it shone in its role as a haven. Revolving throughout 2021 at around $1,780 an ounce, gold has stabilized: in question, a new variant in an endless pandemic, and an inflation index at its highest. high for thirty years.
Unstable Economic Conditions At The End Of 2021
At the end of November 2021, Wall Street was laboriously recovering from the sudden fall in prices at the end of November, under pressure from the Omicron variant. Faced with its presumed virulence, gold was one of the rare investment objects not to give in to panic.
Nevertheless, the price of the yellow metal did not get carried away either as in 2020. Temperance is in order because on the United States side, the dollar is recovering, thus making gold more expensive for those who do not trade. not with US currency. Moreover, a rise in interest rates can be envisaged soon, with the gradual end of the Federal Reserve’s support for the American economy.
However, inflation continues to rise, especially in the USA. In October, it reached 6.2%: in November, it was 6.8%, a level unequaled since 1982. If the inflationary pressure, which reached 4.1%, is considered temporary by certain specialists, traditional investments see their value impacted. Investors then turn to safe havens such as gold.
A haven still relevant in 2022
The yellow metal is indeed one of the best means of alternative investment to protect against inflation. Over the past 50 years, gold has outperformed consumer price indices, with an average return of 11% in US dollars. In times of high inflation, it not only preserves the capital saved but also increases it.
Not offering a priori any return, the capital gain of the yellow metal is realized on the sale. And since 1971, its value has increased by an average of 11% per year. Over the same period, while the performance of gold is comparable to that of equities, it remains superior to that of bonds.
The purchase of physical investment gold is now recommended by wealth management experts, up to 5 to 10% of the savings portfolio.