History shows us that a war between countries, while devastating and unfortunate, is actually a time in which gold investing is advantageous. The February 2022 invasion between Russia and Ukraine is a perfect example. The price of gold had soared in March to $2,045.60 per ounce. Since that time, the price of gold has gradually dropped as low as $1,639.00 on November 3, but is now increasing. Not only is gold priced to buy during such a time, there are also a number of other reasons why gold investors find peace of mind in this precious metal during a conflict.
Wars Impact on Gold
The actions of investors during several past wars give us important knowledge and information about gold investing. According to an article by Yahoo! Finance, the conflicts of the 1970s are critical examples in which investors responded. The Soviet Union invasion of Afghanistan, the Iranian hostage crisis, the Iran revolution, the Iran-Iraq wars all produced excitable changes in the price of gold. The Gulf War of the 1990s, the 9/11 attack on the US, and the US invasion of Iraq are all examples of sporadic uptrends in gold. As wars break out, gold tables typically indicate the beginning of a gradual increase in the price of gold. Even the talk of war has been shown to impact the price of gold.
Reasons Why Gold Is Attractive During War
There are certainly many considerations for a gold investment in the United States today. Consider our economic instability, immigration concerns, price of gas and groceries, the rising national debt, and a chaotic geopolitical landscape, to name a few. While these issues are concerning across America, a wartime conflict ranks high as governments, investors, and families all share the impacts. Most wars including the recent conflict in Ukraine have caused:
- the dollar to become vulnerable depending on the region of the conflict
- the stock market to bear great volatility (dropping seriously as of late)
- economic sanctions that impact trade (imports/exports) on a global level
- personal disruptions in safety, travel, and everyday living
- increasing prices along with shortages in goods and services including fuel
- fear and vulnerability among the masses
- increasing threats from other enemy countries
- a threat to our financial and banking systems
- excessive government spending and mass printing of money (inflation)
As the nation braces for the impacts of war among other concerns, finances are a big part of investor equations. Investors take this time very seriously to ensure their portfolio mix is appropriate to withstand monetary activities that are beyond their control. Investors want to develop a portfolio mix that will not be significantly altered by global outcomes.
Why Purchase Gold at Such a Time as War
As you know, gold is generally described as a tangible, long-term asset that holds its value. In times of worldwide unrest, investors and companies tend to look toward this precious metal when other assets are vulnerable. There are many reasons why to purchase gold at such a time as war:
- The price of gold, as it initially lowers, is a great time to buy. Investors often buy while the price of gold is still affordable and sell later when it skyrockets.
- When gold is rising, it serves as a safe haven for a traditional financial portfolio. Adding gold to the mix is preferred.
- The United States is experiencing a period of the highest inflation in decades; gold is a known hedge against inflation.
- Gold is generally easy to sell, holds its value, and is in high demand.
- Banks are currently paying extremely low interest rates while gold is a long-term investment.
- Cash is vulnerable during wartime while gold tends to become more valuable.
- Gold is a tangible asset depending on whether you choose bars or bullion, or you decide to place it in an IRA.
- Gold is nearly untraceable, not subject to cyberattacks, and does not rely on the Internet or the government.
- The central banks have been buying up gold; but they do not control your gold.
- Gold respectfully trades worldwide.
- Gold has consistently shown the ability to resist stock market vulnerability and inflation.
- Previous conflicts in Afghanistan, Kuwait and Iran saw gold growth periods.
Now may be the best time for investors to consider a precious metals mix as part of their financial portfolio. Gold is currently on the rise again as of November 1, 2022, but still affordable to those who recognize the value in modifying their investments (not putting all of their eggs in one basket).
Get the Guidance You Need For Gold
Making a case for a lucrative gold investment requires the experience and knowledge of a seasoned gold partner. Reagan Gold Group (RGG) has the information you need to make the right decisions for your unique investment mix. Contact RGG today and find out why this period of unrest in the United States is actually the perfect for time to hedge against inflation with gold. Don’t wait. We would love to get to know your needs and guide you for peace of mind.