Gold Is A Hedge Against Inflation

Get in on the gold action now! Every investor should know that gold is a hedge against inflation. There has been a huge movement in the gold price, and there are several reasons for that.

To protect yourself from out of control government spending and sky high inflation your money needs to be in gold bullion, gold ingots, and gold bullion coins

The demand for gold is going through the roof. The demand in 2008 was up 64% as scared investors searched for a safe haven for their money. Countries like China, India, Russia, and Arab states have been steadily increasing their gold reserves. India just made a huge purchase of 200 tons from the IMF.

The amount of gold per capita on the planet is currently 23 grams. That does not even amount to a one ounce coin. The available mined gold on the planet amounts to about $3.7 trillion.

The amount of gold mined each year is 2,600 tons, and the amount of above ground gold sits at about–0,000 tons. That does not cover the demand situation and is only a 2% increase in the supply each year. The supply is actually short of demand each year by 1,400 tons due to the demand of 4,000 tons each year. Gold has been selling at or below the cost of production until this recent surge in metals prices.

Mine supplies have actually decreased by 10% due to suppressed gold prices. Since the fundamentals for the gold price put the price much higher than it has been, why has the price been suppressed?

The gold and silver mine supplies have plummeted by 10% due to the low prices. If you add up all of the fundamentals, gold should be much, much higher.

Why has the price manipulation occurred? There are several factors. Central banks have attempted to suppress the price by selling gold bars onto the market. This tactic did work, but the banks are running out of gold to use as a suppression tactic.

The answer is that there are a few factors that have caused this price suppression and they are still to blame. The central banks have been selling their gold supplies onto the open market in an attempt to suppress the price. It has worked, but central banks are running out of gold to sell.

Even though you can request physical delivery of the gold bullion on the COMEX, some investors have complained of receiving cash settlements or ETF shares instead. The COMEX does not have the gold they claim to have.

The way the default happens is that the COMEX will either give a cash settlement upon delivery, or shares of the GLD (exchange traded fund). Either way, you do not own the physical gold, which means that you are still holding paper. These paper investments have kept investors in dollars, which has fraudulently propped up the dollar.

All of these gold suppression tactics are starting to come unraveled, and with inflation setting in there is no doubt the gold price will continue to explode. Stay away from paper investments if you can, unless you know for sure that they are legitimately holding the gold. Stick with American Gold Coins, American Gold Eagles, and gold bars.

You have every reason to buy gold now due to the falling dollar. Just look at the gold price in the past month. The price of gold per ounce one month ago was $1,058/oz, and the current price of gold is at $1,140/oz. Smart investors are going crazy for gold coins because gold is the only safe investment right now. Educate yourself about the benefits of investing in gold and how to buy gold. You wont be sorry!

Read my other articles about why gold is a hedge against inflation.