Gold bugs – investors perpetually bullish on gold – have long been seen as a paranoid fringe of the financial world, holding the shiny asset as a hedge against a disaster they always think is near. But lately they appear to be on to something. This year gold is the best performing traditional asset in the world. Its price just topped $2,000 an ounce for the first time.
From serious investors to newly minted day traders, everyone is talking up its virtues. A recent survey of 1,000 people found that one in six Americans bought gold or other precious metals in the last three months, and about one in four were seriously thinking about it. On Robinhood, the popular online trading platform, the number of users holding two of its largest gold funds has tripled since January.
It seems we’re all gold bugs now.
It’s tempting to attribute the vogue for gold simply to a desire for a safe haven during the pandemic – a kind of financial panic reflex that will release as the crisis abates. But the gold mania is also driven by a hunch that the easy money pouring out of central banks and government stimulus programmes could trigger inflation, which makes it a more worrisome economic omen.
Serious investors have in the past dismissed gold as an asset that for the most part just sits there yielding nothing. In many ways gold is much like oil or iron ore or any other commodity people dig out of the ground. Most commodity prices rise and fall in cycles, gaining nothing in value over time.
This story is from the August 11, 2020 edition of The Times of India Delhi.
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This story is from the August 11, 2020 edition of The Times of India Delhi.
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