Regardless of how the economy is doing, gold is definitely something you should think about–and here’s why: In periods of rising inflation, as interest rates shoot up, so does the price of gold. Take the 1970s for example, when the federal funds rate was around 8.98% at the start of the decade, according to the Federal Reserve Bank of St. Louis. By January 1980, it climbed to 13.82%. During this time, gold prices soared from $35 per share to a mind-blowing $850 per share, as per NASDAQ data.
It’s valuable even in a rough economy
When the economy is not doing so great, gold acts as a kind of safety net for your money. Historically, as things get worse economically, the price of gold gets better. A peek at the Fed’s March minutes shows that when they predicted a “mild recession”, major indices like the S&P, Dow and Nasdaq took a hit. On the flip side, the price of gold bumped up to $2,042.49 per ounce – that’s almost hitting its 2020 record, according to Reuters. Gold futures even went up to $2,056.90.
Try and picture a scenario where the economy takes an unexpected turn for the worse. Things are more challenging, and many sectors experience significant drops. Amidst all of these adverse conditions, one investment medium that stands its ground and even surges is gold. Due to its historical stability and inherent value, gold holds the potential to not just weather these stormy economic conditions, but to even thrive in them.
It stays valuable even when dollar doesn’t
The value of the dollar can change because of all sorts of things: interest rates, political issues, even how much money the government decides to print. Your earnings could stay the same, but your money just doesn’t go as far – trust me, it’s a nasty situation to be in.
When you’re in a pinch and need some quick cash, options like credit cards and personal loans can be a trap with their high interest rates, trapping you in a cycle of debt for years. Because gold is easy to convert into cash, you can sell it fast to get some extra dough. And because gold usually peaks in value during economic downturns, you could get a lot more out of your gold investment when you need it the most.
