Gold has been the quintessential representation of wealth worldwide for thousands of years – retaining its economic standing even as paper money became our daily currency…
King Croesus of Lydia (now part of Turkey) struck the first gold coins around 550 BC. Gold coins became the most highly valued currency across the developing world.
The first issuance of paper money as a national currency did not occur until the 7th century, in China. Then paper money was used increasingly around the globe.
China stopped issuing paper money in 1455. They had printed so much, the country was suffering from hyperinflation. They wouldn’t use it again for several centuries.
Fiat paper currency through history has been backed by governments instead of a tangible goods such as gold – unlike physical gold, fiat paper currency generally has little or no intrinsic value.
Investors can still turn to gold as the natural substance to diversify wealth.
Through modern history, gold has shown a capacity to grow in value during periods of economic volatility – at times by very high percentages.
Even important global financial institutions and central banks look to gold to help hedge their portfolios against economic stresses. And many individual retirement savers are familiar with the benefits of gold. They have embraced its timeless worldwide role as a physical asset with intrinsic value within their own savings.
The overriding benefit of owning gold is its diversifying and balancing qualities. Its often-uncorrelated price movements offer the possibility of offsetting potential economic volatility.
Gold’s capacity for diversification is important to long-term retirement portfolio success for some savers. This is one reason for gold’s long-standing reputation as a desirable retirement savings choice.
And so many other benefits extend from gold’s diversifying potential.
In a decade of tremendous economic and geopolitical upheaval, gold skyrocketed an astonishing 1,500%.
During the years of this global financial crisis caused by deregulation in the financial industry, gold soared more than 160%.
In the chaotic, legendary last quarter of this one year, gold surged while financial markets suffered (see chart on this page).
In so many other instances, gold has shown itself to be an effective hedge against inflation, financial crises and the factors that can trigger them.
Gold’s positive performance in times of economic stress means it often can act as a hedge against inflation, negative effects of federal monetary policy, trade conflict, political upheaval, crushing levels of debt, and international discord.
For example, when the Federal Reserve announced in June 2019 that it would cut interest rates after raising them four times in 2018, gold surged 14% in just under two months.
Accommodative monetary policy actions like this have been shown in the past to strengthen gold, because a weaker U.S. dollar usually results. While we cannot guarantee similar future results, these are examples that gold can act as a diversifying factor for Americans’ savings.
Learn how gold can help you diversify your own hard-earned retirement savings.
Gold is radiant and gleaming in the form of coins, ingots and bars. But gold’s real beauty is its potential to diversify and balance retirement portfolios.
Call 800-700-1008 and speak to an Augusta Precious Metals customer success agent, personally assigned to you, to learn more about adding this multipurpose asset to your own savings.