The gold metal has been a part of human history since the beginning of time. For centuries, from pharaoh to king, gold metal has been associated with prestige, power, wealth, and freedom. If you don’t know much about this yellow precious metal, reading this information is a great starting point for you.
Then why did I say goldmetall was an insurance policy during the crisis? Before we start to see what happens, I have a question for you; Have you ever had insurance? Otherwise, I assume you’ve heard of insurance at least once and have a basic knowledge of what it is. If you do not escape, Investopedia, one of the best sources of financial education online, defines insurance as follows: “Contracts filed by policies in which individuals or legal entities receive financial protection or compensation from insurance companies. Insurance will be used to hedge against the risk of financial loss. So this is insurance jargon to make it easier to understand, I’ll give my division into unprofessional terminology; Insurance is just a promise to protect something in case of loss. If you want to learn more about some valuable and important major insurance products, check out my article “4 Pillars of Protection: Products You Should Consider in Your Insurance Portfolio”.
However, let me explain why the gold metal was a safeguard during the crisis.
Since this writing, our world has experienced a global pandemic called coronavirus disease or COVID-19. He stopped almost all normal daily activities, leaving large populations of North America and the world unable to work and locked in isolation at home. When I first found out about the disease, it was late December 2020. At the time, an ounce of gold metal was about $1,515. A few months later, when the virus accelerated worldwide, the value of the gold metal peaked at $1,700 in March 2020, slipping back to about $1,650 at the time of writing. It is not atypical that the gold metal dances slightly up and down in the short term, but in the long run the trend is always upwards.
I often tell clients that insurance is what they get, but I hope you never need it. Similarly, it is always good to own a gold metal, because in times of crisis, people who own gold metals have the opportunity to liquidate some of their gold metal assets to get their money’s worth. And that is why the gold metal is a protection not only in times of crisis, but also on time.
Let me explain what I mean when I use inflation-based examples. Using the US inflation calculator, I found that what would have cost $288.50 in 2000 is now worth $433.38, which leads to inflation of 50.2%. This means that your money has lost more than fifty percent of its purchasing power, because now you need more of your dollars to buy the same thing! In contrast, at the beginning of the same year on December 3, 2004, European Court of Justice In 2000, an ounce of gold metal was worth $288.50, but on the first trading day of the year (January 6, 2020), the same ounce of gold metal was worth $1,558.00!* If you know the strength of this yellow metal and only “parked” $288.50 per ounce of gold metal over that 20-year period. , your assets will increase by 440.03%! Inflation increases slowly and gradually over time, which is why so many people are unaware of the losses, but now that you know the numbers, you don’t have to be a mathematician to conclude that 440.03% growth is better than losing 50.2%.
So, if you have to choose a savings car you prefer: cash or gold metal? The bottom line is that when you save gold, you protect your future long-term purchasing power, but when you save money, your purchasing power constantly passes and fights the lost battle against inflation.