Three Reasons to Invest in Gold

This week, I had a long conversation with an old investment friend about gold.

It may sound like a boring conversation given the hot issues in the market and around the world right now.

But as Dan and I talked about economics, politics, technology, and more; I knew that I needed to share what we talked about with you today.

If you have worked hard to set aside savings for your family, you need those savings to be worth something in the future. That’s why you should at least consider some gold and silver investments to protect your wealth.

Here are three big reasons to invest in gold today — before prices move any higher.

Invest in Gold to Protect Against Inflation

For thousands of years, gold has given investors protection from rising prices.

The rule of thumb is that an ounce of gold should be able to buy a high-quality men’s suit. So as prices for the goods we buy rise (in dollars), gold’s value is supposed to preserve your spending power.

(I’m too cheap to spend $2k on a single suit. But I know a few people who consider this a “reasonable” price. So the gold/suit ratio appears to be holding up.)

Inflation is hitting the highest levels in decades. And that means the value of cash is steadily declining.

As an investor — or as a saver or even just a consumer — it’s becoming more important to offset the damage inflation is causing.

The best way to protect your wealth against inflation is to own investments that increase in value as inflation rises. Gold, silver, and other precious metals have held their value for generations — and look like good investments right now as well.

Russia’s War Adds to Gold’s Attractiveness

Russia’s invasion of Ukraine has added another interesting variable for precious metals.

As refugees flee the country, many Ukrainians are trying to figure out how to also move their family savings out of the country.

Meanwhile, global sanctions on Russia and related oligarchs has highlighted the need for some to move wealth out of traditional financial markets and into more portable (and durable) stores of wealth.

Now the world has little sympathy for these bad actors and the hoops they need to jump through to protect their wealth.

But the situation does draw attention to how political and financial powers can freeze traditional means of wealth.

In short, geopolitical uncertainty is driving global demand for precious metals. And as buyers accumulate gold and silver to protect the value (and portability) of wealth, precious metal prices should continue to rise.

The Technical Picture Also Favors Gold

Gold’s price action is another great reason to invest in precious metals today.

Earlier this year, we looked at Gold’s multi-month consolidation, noting that it was a good time to invest in gold.

Following that alert, gold moved sharply higher throughout February and into early March.

More recently, gold pulled back to test the breakout point before finding support last week.

(Click on image to enlarge)

The surge for precious metals so far this year shows how quickly momentum can pick up for this area. And the recent pullback gives investors what could be one last chance to invest before gold pushes to all-time highs (and likely continues to run from there).

While there is nothing “magical” about a price chart, these tools can give us helpful information about buyers and sellers, and give us an idea of how motivated individual traders are becoming as they build positions in gold.

Today, the fundamentals, current events, and technical patterns all point to higher prices for gold. And with all three of these factors trending positive, I’m a big fan of investing in gold to protect and grow your wealth.

In my next alert, I’ll cover a few ideas for how to invest in gold. That way you can make the most of this high-powered trend.