Gold Protects Your Privacy

The phase out of the paper money is near. A growing number of businesses don’t even accept cash anymore. Instead, they are taking credit cards or insisting you tap your debit card.

This means that all of your money — and your transactions — can easily be tracked. If you are familiar with newly implemented open banking in Canada, then you will know that it isn't just the bank that can see your banking transactions, but also the government and third-party venders. Saving money off the radar and out of the system is now a luxury.

Gold is your ultimate private savings vehicle. It is tangible and real, and it doesn’t get tracked digitally. Nobody needs to know everything about your portfolio. Physical gold will ensure they don’t.

Gold Protects Your Purchasing Power

Canada and the United States share the world’s longest land border and they are each others largest trading partner, accounting for close to two-thirds (63.4%) of the more than $1.5 trillion in worldwide trade. To say that Canada is dependent on the US economy is an understatement. 

Value of $1 from 1970 to 2024

The Canadian dollar had an average inflation rate of 3.88% per year between 1970 and today, producing a cumulative price increase of 680.98%. This means that today's prices are 7.81 times as high as average prices since 1970, according to Statistics Canada consumer price index. The cumulative impact of this steady destruction of the purchasing power of the dollar is what harms lifelong savings.

When compared to what it would buy in 1970, the dollar would only buy 50 cents by the year 1981. The purchasing power of the dollar would then drop in half again by the year 1989, and then in half again - down to a value of 12 cents on the dollar by the year 2023. You can see leaving the gold standard in 1977 had an impact on the dollar and how governments treated the printing and distribution of it.

Value of Gold from 1970 to 2024

The average price of gold was $39 per ounce (on the London exchange) in 1970, and it now trading around $3600 per ounce CAD. So, the value of each dollar was way down, the number of dollars that each ounce of gold could buy is way up - did gold effectively protect the purchasing power of savings as it was supposed to?

Why buy physical gold instead of an ETF?

In an economic or currency crisis, mining shares, ETFs, and contracts, like all paper assets, can lose all value. With a gold ETF, there is counterparty risk. You are relying on another party to hold up their end of the bargain. Historically during periods of market crashes and instability, the ETF space for metals has had major risks and shortcomings. But physical gold never has. Physical gold is not someone else’s debt and is not part of a system riddled with vulnerabilities.

Gold Prices and Market Factors

Gold prices are influenced by multiple factors, making them an important investment option for some. During periods of economic uncertainty, many investors turn to gold as a stable asset. Market volatility can cause sudden shifts in gold prices, often driven by world events or currency fluctuations. Inflation is another significant factor since gold often serves as a hedge against rising prices.

Interest rates also affect the price. When rates are low, the opportunity cost of holding gold decreases, leading to higher demand and rising prices. 

Global economic conditions and central bank policies are crucial as well. For instance, if a central bank signals future economic challenges, it may lead to increased gold investments. This intricate relationship between various factors makes gold prices a key indicator of broader economic trends.

Gold Demand and Supply

Gold demand comes from several sectors, notably jewelry and technology, which drive consistent market interest. Additionally, central banks are significant buyers, especially in countries with unstable currencies. Investment demand is another pillar, growing during economic uncertainty or market volatility when gold is seen as a safe haven.

Supply largely depends on mining production, which is influenced by the availability of resources and production costs. Declining ore grades can lead to reduced production and lower supply. Recycling of gold also plays a role in supply, though it accounts for a smaller percentage. The balance between these demand and supply factors largely determines gold prices and market behavior.

Stock Market and Gold Correlation

The stock market and gold often move inversely. When stock prices fall, investors turn to gold as a safe haven. This is because gold maintains its value even when stock markets become volatile. During economic downturns, such as the 2008 financial crisis, gold prices typically rise. Some see this pattern as a reason to diversify by including both stocks and gold in their portfolio. This way, they can potentially balance the risks associated with stock market investments. Stocks offer potential for growth but come with more risk compared to gold.

Impact of Global Economic Trends

Global economic trends significantly impact gold’s future. Key factors include shifts incurrency value and geopolitical tensions. A weak dollar often correlates with higher gold prices, making gold a preferred option for investors globally.

Geopolitical tensions or financial crises can also boost gold demand. During such times, investors see gold as a refuge. The global nature of these influences makes predicting gold’s direction complex, yet crucial. Observations suggest that as economies face uncertainty, gold holds its place as a go-to investment.

How to Start Investing in Gold Now

Nugget Stacker offers precious metals in coins and bars. Each account is personally managed by experienced staff who can answer any question a client may have about owing precious metals.

Nugget Stacker also offers Bullion Subscriptions. Choose from gold or silver, then choose the amount you want to contribute each month. This will determine how long it takes to obtain either a 1oz Gold Maple Leaf Coin - Royal Canadian Mint or 10 oz Silver Asahi bars. This method allows you to buy gold & silver using the dollar-cost average system. Each month you are taking advantage of the highs and lows of the metals pricing.

Nugget Stacker also offers secure storage of gold and silver in our Nugget Vault. At anytime if you want to sell your bullion, Nugget Stacker will purchase it back at the current market rate.

To get started, contact us for a free consultation: 1-866-644-2121 or email: hello@nuggetstacker.com

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