5 reasons for why gold is an excellent hedge against inflation

Did you know that gold was once used as a currency? People used to hand each other gold bars in

exchange for goods and other things.

Did you know that the paper money, also called FIAT, you use today to buy goods and services was

once backed by the good authority of gold and silver.

So, what changed? And why is gold no longer used as currency and instead, used as an asset? We’ll

have to dig deeper into the…

Brief history of the currency system

In 1971, financial history was created when the US decided to move its currency away from the gold

standard to a fiat currency and decided to tie it to a floating rate. After this historic move, US dollars

were no longer tied to anything tangible except guarantees made by the government to the people

to have faith in the government and to trust the issuer of the currency.

This meant governments could print as much as they wanted, because now dollar currency would

not be backed by a predefined amount of gold but held to its own value. Fast forward today we find

the global economy plagued by inflation because governments can simply print more money and put

the country to a brink of collapse by creating too much debt out of thin air

https://www.usdebtclock.org/ in the face of economic crises.

Since the last major crisis in 2008, central banks have already pumped over $25 trillion into the

global economy with over $9 trillion in response to COVID-19 alone which is causing inflation and

rising prices in daily goods and services.

Let’s look at some current examples:

The recent plunge in Turkey’s currency by an average of 1 or 2% a day as their economic policy has

been to keep interest rates low to stimulate lending, which therefore further increases inflation.

In normal situations, investors can protect themselves from bursting bubbles by moving to the safety

of cash, but in precarious times like these inflation fears argue against this move.

“Safe” in these conditions is hedged against inflation through investments into precious metals and

other commodities including energy and food.

Here’s 5 reasons why you should invest in gold and silver if you want to hedge against inflation.

1.) Excellent store of value

Since the US abandoned the gold standard as a currency completely in 1971, Gold has been

considered a “safe haven” during market crashes or black swan events. It’s known to be completely

stable like other precious metals, gold has a limited supply, so it’s value technically cannot inflate like

a currency because they cannot make more of it.

2.) Gold has many applications hence it makes up for excellent investment.

Gold is not just an ancient currency. Apart from being used as Jewellery or plating for other metals, it

also has industrial and domestic applications in electronics, space exploration, dentistry, cosmetics

etc. Gold can provide great returns by investing in mining stocks or ETF’s.

3.) Along with commodities, Gold has been considered a “safe haven” during market crashes

During Covid-19, the global holdings of gold went up by 877 tonnes which is $48 billion in value. This

was the result of investors flocking to gold-based ETFs guided by fear of losing out in the subsequent

stock market crashes following major lockdowns. Like commodities, gold can hold steady when the

market is crashing.

4.) Gold possesses no liability

Holding on to gold is risk free. It cannot be a liability because it won’t fall to zero like a stock does

and does not need to be backed by a company or an institution to hold value and it can never be


5.) Gold has a deep historic basis, making it excellent for long-term holding

The first coins ever to be minted by ancient governments were made of gold. When paper currency

was popularized as a system of barter, governments tied their value to gold as a sign of goodwill. In

1821, England adopted the gold standard which meant that their currency would be tied to the

supply of gold, and an international gold standard for the world was established by Germany in

1871. For nearly a hundred years (1834 to 1933), the value of the US dollar was directly tied to gold

to the tune of 20.67$ per ounce.

Even though the use of gold is no longer as a mainstream currency, governments around the world

still hold and increase their gold holdings.

Accumulating gold and silver through the Utopian Global platform

If you’re looking to accumulate, diversify or save precious metals such as gold and silver, then why

not take advantage of the Utopian Global gold and/ or silver platform.

Utopian Global has been offering gold and silver since 2008. Through Utopian Global you can

purchase gold and silver from as little as 25 Euros.

The gold and silver does come directly from the world’s leading LBMA Referee Refinery Argor-

Heraeus https://www.argor.com/ in Switzerland and the best part is that through the easy to use

platform you can buy small units.

You can choose how many grams you wish to buy as well as choose if you wish to have the precious

metals held in the Utopian Global account for you or if you wish to convert the physical grams into

coins or bars and have them stored or shipped to you.

You can sell back your precious metals at any time to Utopian Global and as a premium account

holder there are no sell back fees attached. a

Utopian Global provides storage via our preferred LBMA storage facility Loomis International

https://www.loomis-international.com/ in Zurich, Dubai or Singapore.

Disclaimer: None of the information contained here constitutes an financial advice, offer (or solicitation of an offer) to buy or sell any product or to make any investment, or to participate in any particular strategy.

Utopian Global does not take into account your personal investment objectives, specific investment goals, specific needs or financial situation and makes no representation and assumes no liability to the accuracy or completeness of the information provided here. The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Utopian Global.