Is GOLD a good investment in 2021?
Is Gold $GOLD $GLD a good investment in 2021?
No. Because gold is not an investment. ๐๐ฉ ๐๐จ ๐ฃ๐ค๐ฉ ๐ ๐ซ๐๐ก๐ช๐ ๐ค๐ง ๐๐๐จ๐ ๐๐ก๐ค๐ฌ ๐ฅ๐ง๐ค๐๐ช๐๐๐ฃ๐ ๐๐จ๐จ๐๐ฉ. It is just an alternative to cash. You don't invest cash, you save cash. And for gold, you hedge gold.
๐ฅ 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 ๐ช๐จ๐ ๐๐จ ๐ ๐๐๐๐๐.
๐ธ 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 ๐๐ฃ๐๐ง๐๐๐จ๐ ๐๐ฃ ๐พ๐๐ ๐๐ฃ๐๐ก๐๐ฉ๐๐ค๐ฃ ๐ฌ๐๐๐๐ ๐๐ฃ๐๐ง๐๐๐จ๐๐จ ๐ฉ๐๐ ๐ฅ๐ง๐๐๐ ๐ค๐ ๐๐ค๐ก๐. 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 ๐๐ค๐ก๐ ๐ข๐๐ฃ๐๐ง ๐๐จ ๐ ๐๐๐ฉ๐ฉ๐๐ง ๐ค๐ฅ๐ฉ๐๐ค๐ฃ. 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. ๐ผ๐ก๐ฌ๐๐ฎ๐จ ๐๐ค๐๐ช๐จ ๐ค๐ฃ ๐ฉ๐๐ ๐๐ช๐จ๐๐ฃ๐๐จ๐จ ๐๐ฃ๐ ๐ฉ๐๐ ๐๐ช๐ฃ๐๐๐ข๐๐ฃ๐ฉ๐๐ก๐จ.
Watch the full video on YouTube:
https://www.youtube.com/watch?v=B4ggoYLs_Ok&list=UUPO3uUyoXSaFWG-Ldq1mqEQ&index=2
My full analysis of Polymetal International:
https://ishfaaqpeerally.teachable.com/courses/662813/lectures/30988867
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