Saving Gold in 2024? (Eng)

The primary motivation for gold savings in 2024 stems from the sustained upward trajectory of gold prices, prompted by apprehensions among economic analysts regarding the prospective economic downturn, prevailing market uncertainties, and prognostications of continued gold price escalations extending through 2025.

Gold was first discovered and used by ancient civilizations such as the Egyptians, Mesopotamians, and Greeks. These societies valued gold for its rarity, beauty, and malleability. It was used for adornment, jewellery, religious artefacts, and as a symbol of wealth and power.

Paper currency, also known as fiat currency, is a form of money that is not backed by a physical commodity such as gold or silver. Instead, its value is derived from the trust and confidence of the people who use it and the stability of the issuing government or central bank which is susceptible to Inflation, manipulation, counterfeiting and so on and so forth.

Since the onset of the COVID-19 pandemic in 2020, the global economy has faced numerous challenges, including:

Recession and Economic Contraction: Many countries experienced significant economic contractions and entered into recessions as a result of lockdowns, travel restrictions, and supply chain disruptions caused by the pandemic. Industries such as tourism, hospitality, and retail were particularly hard hit.

Unemployment: The pandemic led to widespread job losses and increased unemployment rates as businesses were forced to shut down or reduce operations. Workers in sectors most affected by the pandemic, such as hospitality, entertainment, and transportation, faced job insecurity and financial strain.

Supply Chain Disruptions: Global supply chains were disrupted due to lockdown measures, factory closures, and transportation restrictions. This resulted in shortages of essential goods, delays in production, and increased costs for businesses.

Government Stimulus and Debt: Governments around the world implemented massive stimulus packages to support businesses, households, and healthcare systems during the pandemic. However, these measures also led to a significant increase in government debt levels, raising concerns about long-term fiscal sustainability.

Inflationary Pressures: The combination of supply chain disruptions, increased demand for certain goods, and expansionary monetary policies has contributed to inflationary pressures in many countries. Rising prices of essential goods and services have eroded purchasing power and strained household budgets.

Growing Inequality: The pandemic has exacerbated existing inequalities, with low-income households, minorities, and women disproportionately affected by job losses and economic hardship. The digital divide has also widened, with those lacking access to technology or digital skills facing greater barriers to education and employment opportunities.

Healthcare Costs and Healthcare System Strain: The pandemic has placed significant strain on healthcare systems worldwide, leading to increased healthcare costs, overwhelmed hospitals, and shortages of medical supplies and personnel. The financial burden of COVID-19 treatment and healthcare services has further strained household finances and government budgets.

Uncertainty and Volatility: The ongoing uncertainty surrounding the trajectory of the pandemic, vaccine rollout, and potential future waves of infections has contributed to volatility in financial markets and business investment decisions. Businesses and investors are grappling with unpredictable demand, changing consumer behavior, and evolving regulatory environments.

Given the economic challenges and uncertainties arising from the COVID-19 pandemic and its aftermath, many people have turned to saving gold for several reasons:

Hedge Against Inflation: With central banks implementing expansionary monetary policies and governments injecting massive stimulus into their economies, concerns about inflation have risen. Gold is historically viewed as a hedge against inflation because its value tends to rise as the purchasing power of fiat currencies declines.

Store of Value: Gold has a long history of being a reliable store of value, maintaining its worth over time. In times of economic instability and currency devaluation, gold retains its intrinsic value and serves as a stable asset to preserve wealth.

Safe Haven Investment: During periods of market volatility and uncertainty, investors seek safe haven assets to protect their portfolios from potential losses. Gold is considered a safe haven investment because it tends to retain its value or even appreciate during times of economic turmoil, geopolitical tensions, or financial crises.

Diversification: Gold offers diversification benefits to investment portfolios. By adding gold to a diversified investment portfolio, investors can reduce overall risk and volatility, as gold often exhibits low or negative correlation with other asset classes such as stocks and bonds.

Lack of Trust in Fiat Currency: The unprecedented levels of government debt, expansion of the money supply, and concerns about currency devaluation have eroded trust in fiat currencies. Gold, with its tangible nature and limited supply, is seen as a more reliable store of wealth compared to paper currencies.

Preservation of Purchasing Power: With rising inflation and potential currency depreciation, individuals seek to preserve their purchasing power by converting fiat currency into assets like gold, which have historically maintained their value over the long term.

Portfolio Protection: Gold serves as a form of insurance or portfolio protection against various economic and financial risks, including currency debasement, sovereign debt crises, and geopolitical uncertainties.

Cultural and Historical Significance: Gold holds cultural and historical significance across civilizations, making it a preferred choice for wealth preservation and investment. Its enduring appeal and universal recognition contribute to its attractiveness as a savings vehicle.

In summary, people have started saving gold in response to the economic challenges and uncertainties stemming from the COVID-19 pandemic, seeking its qualities as a hedge against inflation, store of value, safe haven investment, diversification tool, and portfolio protection.

"Gold is a currency. It is still, by all evidence, a premier currency, where no fiat currency, including the dollar, can match it." - Alan Greenspan

Explore our website to learn more about Public Gold’s products and services, or contact me today

Afi Jamalludin // Public Gold Authorised Dealer // PG00197352