Should You Invest In Precious Metals In 2022?
In response to Russia’s invasion of Ukraine in late
February, the gold market soared above $2,000 an ounce for
the first time since August 2020. Geopolitical uncertainties
made gold a safe shelter for investors.
have already fallen below $1,800 an ounce as central banks
raise interest rates aggressively, boosting returns from
interest-bearing assets as alternatives to gold and
strengthening the US currency.
Gold market outlook?
Given these price determinants, is gold a smart investment
In this article, we look at gold investment
choices, market factors, and expert predictions for gold
Gold Falls From 2020 High
price missed analysts’ estimates for much of 2021 as
interest rate rises overcame fears about the Covid-19
epidemic and soaring inflation.
Gold is a hedge
against inflation because it holds its value when fiat
currencies lose value. When interest rates rise, gold
becomes less appealing since investors earn neither interest
The gold market was pressured by
predicted rate rises from the US Federal Reserve, ECB, and
Bank of England.
Falling global equities and bond
prices boosted gold’s appeal to investors seeking to
conserve cash during market instability. First-quarter 2022
inflows into gold ETFs totaled 269 tons, or $17bn, the
biggest quarterly total since the third quarter of 2020,
while US Mint sales of gold coins touched their highest
level since 1999.
Gold is used for
jewelry and investing and people just seek to buy gold bars
for sale. Global gold consumption reached 4,021 tons in
2021, up 50% from the fourth quarter.
manufacture accounted for 2,220.95 tons, gold bars and coins
for 1,180.37 tons, central banks and other financial
institutions for 463.07 tons, and technology for 330.16
Should You Invest in Gold?
always been a store of value and means of payment. Many
investors retain 5 to 10% of their portfolio’s worth in
gold, either real bars and coins or ETFs, to diversify and
hedge against stock and bond market disasters.
inverse relationship to the U.S. dollar makes it a potential
hedge against a decrease in the reserve currency’s value.
It’s a good investment during inflation and geopolitical
upheaval or other worldwide occurrences.
Gold has the
best liquidity among precious metals used as portfolio
hedges. Investors might immediately trade gold for cash.
Buying gold online has become increasingly accessible for
Gold, like any other
financial asset, has risks and disadvantages when deciding
if it’s a smart investment. Gold doesn’t provide income like
savings accounts and dividend equities, so its return might
lag over time. High gold price volatility suggests long-term
investments may not be