Gold as Investment
While the market continues to take a hit, the aftermath of Covid being the worse is but a mere dream. Just last week, the NYSE is hit with a wave of Red, pretty much like a sea covered in blood!
As such, investors have been turning to alternatives. In the past, Gold used to be a nice alternative but with the emergence of crypto, the question is if Gold is still a good alternative investment for a bearish economy.
Gold Prices
Prices of Gold theoretically would move inversely with the economy. Surprisingly, Gold Prices are still low, down 7.7% despite an insanely high inflation rate.
Reasons for Pricing Observations
Well, though I read economics, I ain't the best around but here are my hypothesis
-
The Gold Prices are pegged to the USD. So, if the USD is not performing, then naturally the Gold Prices would not perform as well
-
Interest rates have hiked. With that, it is definitely way more expensive and tougher to make leveraged positions and more expensive to hold, and losses will certainly be maximised if the price were to fall (Which it did).
-
The emergence of crypto serving as a huge alternative for Gold
