Is gold a good hedge against inflation?

When discussing retirement plans, people often forget they can invest in Gold or intentionally ignore it. When you’re young, your primary focus will be on how you can grow your money. It’s not necessarily bad, but there’s more to investment than just generating income.

There’s no telling whether global inflation will continue to rise or fall this 2023. If you are not yet thinking about how you can protect your funds, then what are you doing? You can save all you want, but your money will be worthless if the prices skyrocket due to an unexpected global disaster.

Gold Grow Chart: credit macrotrends.net

Gold hedges against inflation effectively for longer time periods, which is only one reason it remains the most significant symbol of wealth worldwide.

Best Gold IRA Companies of 2023 At A Glance

1. Augusta Precious Metals: Editor’s Choice - Great gold ira company overall (4.9/5)

2. Goldco: Runner up - Best Prices and Customer Service For Gold IRA company (4.8/5)

3. American Hartford Gold: Great Price (4.6/5)

4. Birch Gold Group: Great Staff overall (4.5/5)

#1 Augusta Precious Metals: Editor’s Choice - Great gold ira company overall (4.9/5)

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Many consider Augusta Precious Metals one of the best Gold IRA companies. They were praised for years for their transparent services to their customers when curating their personalized retirement plans.

One thing you will appreciate about this award-winning company is its emphasis on education. They provide free guides and materials to help gold investors avoid fraud and recognize when they use a high-pressure tactic to make a sale.

Augusta Precious Metals genuinely want its clients to have a good retirement life. According to Joe Montana, one of the company’s endorsers and a hall-of-fame quarterback, they are the best Gold IRA provider in the United States.

They have received several awards in the past years, and many review platforms have excellent ratings based on their products and customer service. They currently receive zero complaints; if they do, they immediately resolve it.

If you are interested in adding Gold and other precious metals into your portfolio as a haven in economic fluctuations, consider working with Augusta Precious Metals.

The minimum investment cost on their premium/IRA purchases starts at $50,000. Some people may find this too steep, especially for beginners. However, despite this higher initial purchase cost, the number of satisfied clients mirrors how trustworthy their services are.

Pros

• Prioritizes investor education

• Helps their clients to curate a retirement plan that works best for them

• Excellent reviews from verified clients

• The overall process is quick and easy

Cons

• Pricing information on Gold and Silver is challenging to find

• Higher spread on premium purchases

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#2 Goldco: Runner up - Best Prices and Customer Service For Gold IRA company (4.8/5)

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Goldco is a top contender among the best Gold IRA companies today. They have over a decade of experience in the industry, helping customers with their retirement savings.

The Gold IRA industry is not yet as regulated as the other investment assets, so you need to find a company that prioritizes your interest and needs.

Goldco Precious Metals excels in that area. They provide specialists to guide you in protecting your assets with a Precious Metals IRA. You can also rely on them if it would benefit you more to do a Gold IRA rollover and establish a new account for this purpose.

Aside from Gold and Silver IRAs, they also offer various services. This includes selling non-IRA precious metals, buying back gold and silver bullion, and more. If you are interested, you can contact them directly to inquire how they can help you with your investment needs.

Goldco received an A+ rating from the Better Business Bureau and an AAA rating from the Business Consumer Alliance. Both platforms are known for providing authentic and reliable ratings of companies. This shows that you can trust Goldco and its services.

Compared to Augusta Precious Metals, whose minimum investment is $50,000, Goldco’s IRA starts at $25,000. If you want to get a closely similar service at such a lower price, consider working with Goldco.

Pros

• All bars and coin bullions are certified

• They provide news and updated articles to keep you informed about the industry

• Consumer Affairs Accredited

• Endorsed by various media figures like Sean Hannity

Cons

• Pricing information is hard to find before signing up

• No available information on custodian and storage fees

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#3 American Hartford Gold: Great Price (4.6/5)

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American Hartford Gold is an IRA company established in 2015. They can help you diversify your portfolio by investing in precious metals, mainly IRA-eligible coins, and bars.

Unlike most IRA companies, this company allows its customers to set up an IRA account in three steps. You can also choose among the three depository companies to ensure the safety of the metal holdings.

The company has knowledgeable industry professionals that work with families so they can protect their assets and take advantage of any market movements. They even claim a 100% customer satisfaction guarantee, making them one of the most recommended Gold IRA companies in the country today.

American Hartford Gold received an A+ rating from the Better Business Bureau, which signifies the quality of its services. In addition to that, they have competitive pricing and special deals provided for their clients.

American Hartford Gold’s minimum investment on IRA purchases starts at $10,000. This is relatively cheaper compared to what other companies are requiring. They also have various product options, including platinum and palladium.

Pros

• Advertises special deals like $1,500 worth of free silver with no maintenance fee for three years

• They provide specialists at your disposal

• Customer service is the company’s top priority

• Complete cost disclosure before the final sale

Cons

• International shipment is not available

• The price list is not provided on the website

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#4 Birch Gold Group: Great Staff overall (4.5/5)

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Birch Gold has been in the precious metals IRA industry for almost 20 years, and they were experts in providing customers access to such alternative investment assets.

Aside from Gold and Silver, they also offer platinum and palladium. You can access this either through IRA investments or personal ownership.

One of the things people love about the company is the real-time market performance available on their site. Through this, their clients can track how well the precious metals are doing in the current financial markets.

Yes, Birch Gold does prioritize not only Gold and Silver but also its platinum and palladium products. These two other precious metals are just as crucial in this economy, given that most of the Palladium products in the world come from South Africa and Russia.

Not all IRA companies offer platinum and palladium, which only shows how committed Birch Gold is to help their clients diversify their retirement portfolios.

They received an A+ rating from the Better Business Bureau, and their customer satisfaction is only one of the many reasons they remained one of the best providers of precious metals IRA for almost twenty years.

Pros

• Low minimum cost on IRA-purchases

• Transparent fee structure

• The company also offers platinum and palladium products

• They also provide non-IRA purchases

Cons

• Contact details are limited

• The website can be confusing to navigate

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Is Gold A Good Hedge Against Inflation?

Generally, most investors consider Gold as the best inflation hedge these days. This yellow metal has been an essential part of the world’s economy for thousands of years and certainly rises to market expectations.

It can preserve its value for a long-time despite market fluctuations because Gold and currencies have a negative correlation. For example, even if the dollar index weakens, it won’t affect Gold prices and its ability to retain its value and purchasing power.

In most cases, the increase in consumer prices can raise the price of physical Gold as long as it meets the pure qualifications of precious metals. People who plan on diversifying their retirement portfolio should consider adding precious metals for their ability to maintain their money’s worth for decades.

Unlike stocks and other assets, you don’t have to track precious metals’ current and past performance. You will not experience a significant negative return if its value fluctuates.

One of the main reasons people often look past Gold and other precious metals when planning their retirement plan is that they will only get a little income from it. Its primary purpose in investment is to safeguard portions of your wealth.

Experts suggest that you invest 5% to 10% of your total fund into precious metals; the rest is for the assets that would generate passive income in the long term. Holding Gold in your retirement plan can be a good hedge against inflations, and you can keep your funds’ buying power.

Gold’s History As An Inflation Hedge

The United States saw a multi-decade high in inflation in 2023. It was in the 1970s up to the early 1980s when the country last experienced an out-of-control rising inflation.

This period gives investors an insight into how beneficial investing in precious metals is, especially when no one is certain about what’s happening next in the world’s economy. The inflation rate of 8.8% from 1973 to 1979 was due to oil price shocks and energy shortages, which led many investors to see first-hand how excellent this precious metal works as an inflation hedge. It generated a 35% annualized return, which is pretty impressive compared to other asset classes.

After that period, Gold performed poorly each year. The inflation rose to 6.5% from 1980 to 1984, but the price of the precious metal continued to fall.

Gold’s Performance As An Inflation Hedge Today

The Consumer Price Index (CPI) gained 4.2% in over a year last April 2021. It was the first annualized gain of more than 4% since 2008. After that, the average annual Consumer Price Index growth in the United States was around 6.8%. It has an average yearly growth rate of 1% in the same period.

Mixed records suggest that many investors will be more interested in gold investment to maintain their purchasing power in the current inflation expectations. Looking into gold bullion, coins, and other precious metal investments is better than focusing on central banks.

While government bonds and interest rates from other choices offer promising results, many studies support that Gold is a good inflation hedge, especially for long-term investments. However, it will not provide significant income, so it is not recommended for short-term investments.

What Are The Best Inflation Hedges?

Gold rose to its position and will always be a top option when considering the best hedge against inflation. Unlike digital currencies, it is more likely to keep its value for the next few decades.

However, you can still rely on the stock market in times of inflation. Its fluctuations will hurt you over a certain period, but it’s possible to still get your money’s value back and generate income after some time.

For example, S&P 500 is unpredictable and volatile. However, its income returns have been consistent if we’re going to measure them in decades. This makes them one of the best inflation hedges.

Starting from 1926, the asset’s rolling annual 30-year return stayed between 8% and 15%. This is good enough to be your hedge during times of high inflation rates.

If you are not comfortable with the volatility of the stock market, better inflation hedges include specific types of bonds, such as I bonds and treasury inflation-protected securities.

I bonds yield around 9.62% and are guaranteed by the government. Investors should hold them for at least a year. You could lose three months’ interest rate if you cash out within your five-year time horizon.

On the other hand, fixed-income securities can ensure gain over some time. Real estate investment trusts are also often considered due to their long-term benefits. These options are a reliable inflation hedge.

Benefits Of Investing In Gold

Although Gold has its inconsistencies as an inflation hedge, it can still provide inflation protection if you keep your asset stored for longer periods. It offers a lot of value in diversification because of its negative correlation to stocks and bonds.

During the 2020 pandemic, this asset could hold up pretty well even if other asset classes declined. Many investors looking for ways to secure their funds helped increase the demand for this yellow metal. The World Gold Council states an increase of 12% in the first half of 2023.

Gold returns are not as high as stocks and bonds, but they can maintain your money supply and have better chances of getting good future results.

Investors can also trade gold futures contracts that will provide leverage to control large quantities of Gold with a smaller amount of money.

How To Invest In Gold?

If you’re interested in investing in Gold and other precious metals, there are multiple ways to do it.

Owning physical Gold and other precious metals in the form of coins, bars, and jewelry is the most popular way to start investing. These types of investments suit a buy-and-hold strategy.

That’s why it works best for long-term investments. It would not work as well for people who want liquidity.

If you are not interested in owning physical Gold due to the hassle of insuring and storing the metal holdings, you can try gold-backed ETFs. They have shares tied to the gold assets stored in bank vaults.

Gold investors can also consider investing in gold options and futures. However, they are not for the faint-hearted. Although these alternative investment assets can provide a high reward, they also come with increased risk.

Investing In Gold During Inflation: Is It Worth It?

As the prices in America continue to rise, there’s always a fear that the purchasing power of people will weaken as the dollar declines despite the amount of money they are earning. Take Venezuela’s hyperinflation as an example, wherein the currency declines alongside people’s ability to buy things. Even if you generate high income from different asset classes, you won’t be able to use them when hyperinflation occurs.

Although experts believe that hyperinflation is unlikely in the nearest future, you should not wait for it to happen before starting to secure your funds. Buying Gold to protect your money today can help prepare you for the uncertainties in life.

This alternative investment asset will be your best option if you want to keep your hard-earned fund long. If you are unsure how to make this happen, you can contact an IRA company representative or financial advisor to get investment advice.

Gold will always be important to the economy. It’s been used as currency for centuries and is more likely to last than the value of liquid money you have.

Final Thoughts - Gold Hedge Against Inflation

Gold will always be a symbol of wealth, and there’s no doubt about that. If you are not yet considering investing in Gold and other precious metals, will you wait until a disaster happens before you can secure your funds? The purpose of investment is to prepare for the worst, and there is no better inflation hedge than Gold.

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With inflation, supply shortages, and global conflicts, there’s no telling when the dollar will have its buying power. It would help if you started thinking of ways to keep your money’s value, and the best way to do that is to check out today’s Gold price!