Gold investing.

During a Financial Crisis, Gold Is Still Your Best Bet
When it comes to a financial crisis, investors will want to have gold on their side based on data from yesteryear.
“During major financial crises in history, gold has vastly outperformed paper assets,” wrote Stefan Gleason of Money Metals Exchange.
From a micro perspective, investors only have to look at the height of the ongoing pandemic in 2020. As the major stock market indexes were selling off, a sustained flight into safe haven assets saw gold rise almost 70%.
In the current market landscape, a number of analysts are eyeing inflation as the next major market disruption. Talks of stagflation, high interest rates, and low economic growth, could provide the perfect backdrop for investors to start adding gold.
Should the markets get shaken up again, gold can offer an ideal respite from equities exposure.
“Given the tremendous inflation pressures currently exerting themselves in the economy, the late 1970s may be the best model for what to expect going forward,” Gleason noted.
Despite lackluster third quarter and year-to-date performance for gold, the fundamental backdrop for precious metals and related mining share prices continues to strengthen in our opinion.
Real interest rates remain deeply negative, a positive for gold. The average annual return on gold during periods of negative real interest rates has been a stellar 21.12%.
Physical gold buying centered in India and China has risen dramatically. Indian demand alone is 500 tonnes greater than it was in 2020, more than enough to absorb current mine supply.
Net buying of gold bullion by central banks is likely to continue and may possibly increase.
Gold mining stocks thus represent huge leverage in the face of a potential loss of confidence. Downside risk is low because they are deeply undervalued.
A 2022 slowdown is not in the cards. This view is getting more and more traction in the market, and unfortunately is getting more and more likely.