Revenge of the Gold Bugs

In America’s stock-market-obsessed society, investors who favor gold are sometimes the butt of jokes, pejoratively referred to as “gold bugs.” While stock market players bid share prices up based upon optimistic views of the future that may or may not come to fruition, gold investors are often more sober and, they’d argue, more realistic. Some are mistrustful of governments, central banks, and globalization. That lack of faith, often scoffed at in good times, now seems to be ruling the day under the new normal of the coronavirus pandemic.

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“We’ve been trying to warn people that something like this would happen,” author Jim Rickards told Bloomberg News. Rickards, who has forecast a coming financial collapse, recommends holding gold for wealth preservation. “I’ve been saying it for years,” he said. “I’m not happy about being right.”

Indeed, the global disaster has forced governments to limit civil liberties; citizens have stocked their homes with amble supplies of enough food and toiletries to survive weeks of home confinement; the Federal Reserve, trying to prevent a depression, is injecting cash into the economy at an unprecedented pace, which can devalue the U.S. dollar; and stocks have taken a beating in the most volatile market action in years. As of May 22, the Dow Jones Industrial Average had lost 14 percent for the year, while gold was up 13 percent.

“We’re seeing lots of interest because we’ve been pounding the table for gold as a portfolio stabilizer. It’s a defender of your portfolio, and gold did its job really perfectly,” said Ronald-Peter Stoeferle, managing partner of Incrementum AG, a Liechtenstein-based investment and asset-management company that manages several gold funds.

Physical gold has kept its value over centuries, can be stored in a vault with no counter-party risk of default, has deep, liquid markets in which to trade, and can serve as a hedge against inflation.

“Gold will thrive as the money par excellence,” said Roy Sebag, chief executive officer and founder of precious metals investment firm Goldmoney Inc.

Become a gold bug.

Begin your gold investment journey today.