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Focus On Gold As A Safe Haven

Amanda Cheesley

31 March 2024

Atlanta-headquartered investment manager , a London supplier of gold bullion and investment services, also sees many benefits in holding gold, and highlighted why it should be the next best investment for an investor's portfolio.

“Unlike other forms of investment, gold is a good hedge against systemic risks; this is because its value is intrinsic and is not reliant on a promise to pay. While economic downturns and geopolitical instability may send the value of stocks and bonds plummeting, gold thrives during uncertainty, earning itself a reputation as a safe haven asset,” Sharps Pixley said in a note this week. 

“Even cryptocurrency, previously thought to be immune to market slumps, has taken a recent nosedive. In our increasingly digital world, gold is a real asset you can see and touch, its value shining in your hand,” the firm continued.

“Another benefit of owning gold is the safe haven it offers during deflation. Unlike paper currency which can suffer from purchasing power fluctuations, gold cannot be devalued at will and therefore owning gold is a way to lock in purchasing power,” the firm added. It is also a good hedge against inflation, in periods like this.

Moreover, gold is a scarce and finite commodity, Sharps Pixley said. “The world’s central banks own the largest gold reserves and they are accumulating more at a rate not seen for over 50 years. A recent survey by the World Gold Council reveals that a staggering 71 per cent of global banks plan to beef up their gold holdings in the coming year,” the firm added. 

Wrapping up, Sharps Pixley said gold not only diversifies a portfolio but also acts as a protective bulwark against inflation and a safe harbor during deflationary periods and times of geopolitical turmoil, much like the current global climate. “Furthermore, worldwide demand makes gold easily bought and sold. While other types of investments may thrive under economic certainty, gold is here to weather the storm of the good and the bad times,” the firm said.