In Gold We Trust

In Gold We Trust by Jessica Cohn- Kleinberg

“It’s a tale as old as time.”

I’m not referencing the live-action remake of Beauty and the Beast released this past week. I’m talking about gold — and the rich role it has in any savvy investor’s portfolio.

See, gold can be a fantastic hedge against inflation, geopolitical uncertainty, irresponsible banks, the Fed and even many black swan events. When investors lose confidence in the economy and markets — they rush to gold, which continues to be seen as more trustworthy than any government-issued currency.

After all, it’s held value for centuries, and it’s not disappearing anytime soon.

While gold has had its struggles these past few years — like in December of 2015, when gold hit a six-year low — nothing has changed about the very real fundamental reasons for adding this asset to your holdings. Which is why the metal has been in an overall rally since the U.S. abandoned the gold standard in 1971.

Savvy investors understand that value.

In fact, this past week, gold rallied to its highest finish in two weeks in the wake of Janet Yellen’s announcement. While the Fed raised rates by 25 basis points, as expected, it gave a much more cautious outlook than most analysts anticipated, keeping to its forecast of just two more hikes in 2017.

So precious metals bounced.

April gold futures climbed 2.2% to $1,227.10 an ounce — the largest one-day percentage climb since June 2016. Silver (gold’s sister metal) enjoyed a nice bounce as well. May silver futures jumped 2.4% to $17.33 an ounce — the highest daily percentage gain since January.

So to those who dismiss gold as an archaic “currency” out of place in a modern portfolio the way a tube television would be in a shiny-new smart home … I raise an eyebrow or two at their shortsightedness.

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Banyan Hill

Ted joined The Sovereign Society in 2013. As an expat who lived in South Africa for 25 years, Ted specializes in asset protection and international migration. He is the editor of The Bauman Letter and Plan B Club.