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  • Writer's pictureIshfaaq Peerally

Is GOLD a good investment in 2021?

Is Gold $GOLD $GLD a good investment in 2021?

No. Because gold is not an investment. ๐™„๐™ฉ ๐™ž๐™จ ๐™ฃ๐™ค๐™ฉ ๐™– ๐™ซ๐™–๐™ก๐™ช๐™š ๐™ค๐™ง ๐™˜๐™–๐™จ๐™ ๐™›๐™ก๐™ค๐™ฌ ๐™ฅ๐™ง๐™ค๐™™๐™ช๐™˜๐™ž๐™ฃ๐™œ ๐™–๐™จ๐™จ๐™š๐™ฉ. It is just an alternative to cash. You don't invest cash, you save cash. And for gold, you hedge gold.

๐Ÿฅ‡ Gold is known to keep its value over time. You need the same amount of gold to buy a loaf of bread today as you would have needed in Ancient Babylon. Although gold has some industrial applications, what really affects its price is its ๐™ช๐™จ๐™š ๐™–๐™จ ๐™– ๐™๐™š๐™™๐™œ๐™š.

๐Ÿ’ธ Is Gold a good hedge against inflation? Today, we have monetary inflation and asset price inflation but not really CPI inflation yet. Normally, it is an ๐™ž๐™ฃ๐™˜๐™ง๐™š๐™–๐™จ๐™š ๐™ž๐™ฃ ๐˜พ๐™‹๐™„ ๐™ž๐™ฃ๐™›๐™ก๐™–๐™ฉ๐™ž๐™ค๐™ฃ ๐™ฌ๐™๐™ž๐™˜๐™ ๐™ž๐™ฃ๐™˜๐™ง๐™š๐™–๐™จ๐™š๐™จ ๐™ฉ๐™๐™š ๐™ฅ๐™ง๐™ž๐™˜๐™š ๐™ค๐™› ๐™œ๐™ค๐™ก๐™™. Since it is likely that in the coming years, we will have higher inflation, it is also likely that we will see higher gold prices. If the Federal Reserve System raises interest rates to fight inflation, this would make stocks unattractive and gold might be the best hedge against inflation. However, nobody knows for sure what will happen in the short term.

โ›๏ธ I believe it is always a good idea to hedge against the possibility of higher inflation. But instead of holding gold, I believe that ๐™– ๐™œ๐™ค๐™ก๐™™ ๐™ข๐™ž๐™ฃ๐™š๐™ง ๐™ž๐™จ ๐™– ๐™—๐™š๐™ฉ๐™ฉ๐™š๐™ง ๐™ค๐™ฅ๐™ฉ๐™ž๐™ค๐™ฃ. Gold mining stocks are more volatile but if gold prices can increase, they can generate cash flow and return it to you.

That doesn't mean you should invest in a random gold miner $GDX . I invested in Polymetal International $POLY.L since 2019. ๐˜ผ๐™ก๐™ฌ๐™–๐™ฎ๐™จ ๐™›๐™ค๐™˜๐™ช๐™จ ๐™ค๐™ฃ ๐™ฉ๐™๐™š ๐™—๐™ช๐™จ๐™ž๐™ฃ๐™š๐™จ๐™จ ๐™–๐™ฃ๐™™ ๐™ฉ๐™๐™š ๐™›๐™ช๐™ฃ๐™™๐™–๐™ข๐™š๐™ฃ๐™ฉ๐™–๐™ก๐™จ.

Watch the full video on YouTube:

My full analysis of Polymetal International:


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