Gold and inflation: everything you need to know

The price of gold reached its all-time high in 2020, during the Covid-19 crisis. Since then, the price of this metal has fallen, stabilizing around $1,800 per ounce. The war in Ukraine has cast doubt on stock prices, causing a devaluation of the European currency. When the euro falls, purchasing power decreases and citizens become poorer. However, we note that gold and silver have held up and are starting to play a protective role for investors.

Unlike government and corporate bonds, gold does not earn interest. The added value, if it exists, is made when the product is sold. This is why investors and people who wish to protect their assets and heritage opt to purchase silver and gold coins or bars. The price of gold is not indexed to the financial health of banks and governments. This independence allows the price to remain stable over time. If you fail to generate dividends, you do not lose money. In times of crisis, this is not insignificant. It is for all these reasons that gold is considered a safe investment.

Gold has entered a phase of stagnation and waiting. The fall of the euro, the increase in oil and gas prices linked to the war in Ukraine and the rise in interest rates provide fertile ground for growth in the price of gold. Current indicators may therefore suggest that it is time to invest in gold. Before buying a gold bar, keep certain criteria in mind:

• The price of gold depends on supply and demand. Currently, China and India are buying less gold;
• The quotation is influenced by the rate of the American dollar;
• The mass purchase of gold by central banks causes the price to vary: financial institutions have increased their gold reserves by several tons in recent months;
• The fall in stock indices causes the price of gold to rise.

Investing in gold is a long-term, even very long-term, investment. Investors are adopting this solution to diversify their portfolio. It is a bet on the future that carries little risk, unlike other stock prices and indices. The year 2022 offers an opportunity for people who want to protect their purchasing power.

The geopolitical context pushes investors to diversify their investments. In the event of a crisis or excessive devaluation of the currency, there is a risk of significant loss of capital.

Life insurance, the preferred investment of the French, is indexed to stock prices. Insurers have favored savers who invest in units of account to generate better returns. Today, life insurance has interest rates below inflation. Every euro saved is partly lost. The other vector of interest for life insurance is the euro fund, mainly equipped with government bonds. The arrival of negative rates a few years ago had a strong impact on yields. The loss of household money is therefore very real and gold, through its stability, has many advantages for safeguarding one's assets.

On the other hand, gold taxation benefits investors. The purchase of gold in coins, bars or ingots is not taxable and only capital gains are taxable. In addition, you can give gold bars to your loved ones easily, from hand to hand. Your children and grandchildren will then be subject to the inheritance scales (exemption between spouses or persons linked by PACS, flat-rate reduction for children). Finally, the possession of gold and silver is not included in the calculation of the ISF.

You would like more information on gold and inflation ? You would like to acquire a gold or silver ingot ? The professionals at Gold Union will meet you in the Gold Union agencies or contact you remotely. You will be able to discover the range of bars and coins offered by Gold Union and invest in gold in complete security with a trusted partner. You wish to sell gold ? Gold Union assesses your jewelry and your physical gold before sending you a free quote.