How To Buy Gold As An Inflation Hedge Right Now

Inflation is in the news again, and that has many consumers worried about their savings and how far their incomes will go. Prices have been rising rapidly across the board. In the U.S., inflation has hit an alarming 5.4%, while north of the border, inflation in Canada is at an elevated 3.6%.

Is inflation really that high at those numbers? By comparison, central banks usually target an inflation rate of around 2% and adjust their monetary policy around that goal, including interest rates. But there seem to be few signs that interest rates are going to recalibrate, as there are still long-term concerns about the pandemic-hit economy. In Canada, an interest rate hike could threaten the real estate market, and there seems to be little political will to jeopardize over-leveraged new homeowners, even if it means everyone else’s savings will suffer.

Not only does high inflation mean that your earnings won’t go as far as they used to, it means that your savings are losing value at a more rapid pace.

How Gold Protects Against Inflation

Gold is an asset that both diversifies your portfolio and counters the effects of inflation. It tends to have a negative correlation with equities. Prices surge when confidence in the market drops. Market crashes and recessions tend to be where gold makes most of its price gains before settling into a more stable pattern and plateauing.

These long-term cycles help gold retain value. As with any asset, it’s impossible to predict year-over-year results. But looking at the history of the precious metal, it’s been a source of stability that’s key to wealth preservation for centuries.

Those qualities have survived from ancient times and continue to work in today’s much more complex financial systems. When the value of money itself declines, investors put their faith in gold.

How to Buy Physical Gold

If gold is the answer to inflation, you need to know how to buy gold bars in Canada. Buying from a gold bullion dealer is the securest way to get access to this asset. Here are the steps to take:

• Do your research and find local bullion dealers that are well-reviewed and established.
• Start comparing gold bars from different mints and refiners.
• Keep in mind that not all mints and refiners are as recognizable as others. Bigger, trusted names are more liquid, and you will be able to resell quickly.
• Find the optimal price-per-ounce of pure gold.

As inflation fears rise, gold can provide inflation-beating returns that will protect your savings better than keeping it in cash. Gold has a proven track record for maintaining its value over the longterm.

There’s a saying that an ounce of gold has always cost the same as a decent suit, and if you compare prices through the decades, the relationship has been surprisingly consistent. Gold is an asset that’s been preserving wealth for hundreds of years, and there is little reason to expect that to change.