Like most countries, South Africa is experiencing high inflation levels in the wake of the pandemic and recent events in Ukraine. The effects are being felt in supermarkets, at filling stations and in our monthly utility bills. Consequently, many of those with some cash to spare are seeking a means to combat steadily rising prices. Many South Africans are now asking whether Gold investments might provide a possible safety net during these troubling times.
Historically, the yellow metal has proved itself repeatedly, showing gains when other options are in decline. Its value as a hedge against inflation is well-established. One prominent US asset management company notes that, since 1973, Gold has consistently outperformed the national inflation rate by two per cent and continues to do so. This observation alone confirms the importance of this Precious Metal as a means of long-term protection against the effects of inflation. Bullion coins such as the Krugerrand offer an affordable entrée for anyone considering Gold investments.
While the world’s reserve banks regulate currency value by purchasing and selling kilogram Bullion bars, few private investors can afford to deal in such large quantities. To encourage investment among the general population, the South African government introduced the 22-karat, one ounce Gold Krugerrand in 1967. The iconic minting quickly became the first legal tender Bullion coin to gain worldwide popularity as a collectable item and an investment vehicle. The subsequent introduction of the half-, quarter- and tenth of an ounce-versions has made Gold investments even more accessible to those of more modest means. For those with a little more to spend, there is the option to purchase 100-, 50-, and 10-gram Minted Bullion bars.
While there is ample evidence to support the benefits of investing in this Precious Metal, a word of warning is necessary. Like share prices, the value of Bullion does occasionally fall, although it is far less volatile than most other commodities overall. If you are looking for overnight riches, perhaps you would be better advised to buy lottery tickets. Whether you purchase Bullion or one of its exchange-traded commodities, you need to think of Gold investments as a long-term strategy. As a tradeable asset, the yellow metal has undoubtedly stood the test of time. Furthermore, the ongoing demand from Jewellery manufacturers and the electronics and aerospace industries offers investors ample reassurance of its future value. One thing that has become abundantly clear is that a rise in the inflation rate inevitably increases the demand for Gold.
We are now in the second quarter of 2022, and the prospects for the remainder of the year are hardly optimistic. The expectation is that inflation will continue to rise, driven by the lingering effects of Covid-19, the Russian invasion of Ukraine and other potential geopolitical conflicts. On the plus side, Gold investments offer a means to survive the current crisis profitably.
If you would like to learn more about how this Precious Metal can protect you from the effects of rampant inflation or purchase authentic Krugerrands and Bullion bars, visit one of the Mr K stores in Gauteng or the Western Cape. We also offer the opportunity to buy these items online to anyone seeking the proven hedge provided by Gold investments.
Disclaimer: The information above was derived from reliable sources and deemed accurate at the time of writing. However, changes following publication may have affected its accuracy. Such changes may occur without notice and Mr K cannot be held liable for inaccuracies in this article’s content or how a reader may choose to interpret it.
