Hedging against Inflation:


Gold has proven itself as an excellent hedge against inflation, 

Gold Price tends to get higher when there is an appreciation in the cost of living over the past 50 years. 

Proven by the positive moves gold price make when currencies are hit by inflation, Those Years of inflation have always impacted the stock market negatively.  

Gold is known among the investor community that it is one of the best stores of value especially when inflation hits economies, 


A Shelter in Times of Depression:

A Depression is known as a period of price decline, A slowdown in commercial activities overwhelming the economies with debts.

We did not experience a recession worldwide except for the great depression during the 30s of last century 

(However, there was a slight depression after the 2008-2009 recession in different regions of the planet)

Demand for Gold raised massively, People choose to buy gold over any alternative even though there was a massive decline in prices.


Geopolitical uncertainty:

Gold Keeps its value not only in times of financial uncertainty but also when there is any kind of Geopolitical uncertainty (The thing that will affect the financial atmosphere later) 

As it is known as the best tool during any crisis.

Gold for example experienced a critical movement during the Russian-Ukrainian war.

Prices of gold raise at higher rates when investors start to lose trust in governments.


Supply Restrictions:

Since the start of the 90s, the highest source of supply was the sold bars of central banks, these selling processes were slowed down after the great recession of 2008, Meanwhile Gold production was reduced from 2573 tons in 2000 to 2444 tons in 2007 according to bullion vault.

The production went back to appreciation after the Geological American scan and reached 2700 tons by 2011

The accelerated demand:


During the past few years, the accumulated wealth of the developing economies has reinforced the demand for gold. 

Some of those countries have a cultural attachment to gold.

In China, gold bars & ingots are a traditional saving tool.

India also is the second-largest gold consumer, Wedding Seasons in India which occur in October witness the highest demand annually.

Investors also developed remarkable demand rates for gold, which is now considered the main tool in most portfolios.

In The United States of America lately, (SPDR Gold Trust ) ETF became one of the major ETFs there besides having the highest reserve of gold bars worldwide.


A Weak USD Index:


Despite being one of the most reserved currencies in the world when the USD value declined against other currencies between 1998 to 2008 Investors tended to move most of their capital to a secure asset like Gold. 

Which leads to an appreciation in the gold price. 

A logical result of the gains in the gold price as the price has doubled between 1998 to 2008 reaching $1000.00/Ounce before it doubles again between 2008 to 2012 to reach the historical $2000.00/Ounce