As Good As Gold
Gold as an investment alternative is garnering renewed interest among retail investors, especially as rising concern about de-dollarization is prompting a search for non-correlated assets bereft of counterparty risk. Billionaire hedge fund manager John Paulson recently underscored this concern when he advised his investors they were better off owning gold.
The global financial stage is experiencing notable shifts, and the shadow of de-dollarization, the reduction in reliance on the US dollar for international trade settlement and reserves is increasingly becoming a matter worthy of retail investor’s attention. The shift has sparked interest in the search for alternative investment strategies, those that will safeguard against potential currency volatility and depreciation brought about by the spectre of ever increasing de-dollarization.
Well before 1843 when Charles Dickens wrote the famous phrase in a Christmas Carol, “as good as gold” it had established an enduring legacy as a store of value and a hedge against inflation. It has historically been viewed as the safe-haven asset of choice. Its intrinsic value has remained resilient over time due to its limited supply and global demand. Traditionally, during periods of economic uncertainty, geopolitical instability, and currency devaluation, gold has attracted higher demand, driving prices upwards. It is little wonder that over the last year the price of gold has increased from $1,620 to $2500 per troy ounce, a leap of 54%. This has been driven in large part by a buying spree from Central Banks, notably China, Russia and India but many others. In the case of the Peoples Bank of China, funded by the sale of its US debt securities, orchestrated specifically to induce de-dollarization.
Read full article below: