The “super-rich” of the world are hoarding gold. I’ve often suggesting emulating the rich in order to become rich, and this is no exception.
Gold has had an excellent year, with the prices up 20%. In fact, in a note to clients published over the weekend, analysts at Goldman Sachs outlined why the strategic case for owning gold remains strong. The firm cites political uncertainty and recession fears that are unlikely to abate as primary catalysts, among other worries among the global elite like wealth taxes and increasing talk about MMT (Modern Monetary Theory) and central bank effectiveness.
The main point is that the wealthy know how to protect their assets, and if they are buying gold, perhaps we should be too. Especially considering the price is expected to rise from it’s current $1460 mark to over $1600 an ounce in 2020.
That’s a decent return on investment, but gold is also insurance. I’ve also stated that before. An ounce of gold will still buy today what it would buy back in 1900. The same cannot be said for any of the fiat currencies being manipulated by government’s around the world.
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The wealthy have also taken to owning the physical metal too. It appears to be the global elite’s preferred way to hedge against tail events, or “insure” their personal wealth against a global recession brought on by years of inept monetary policies of governments and central banks. “Since the end of 2016 the implied build in non-transparent gold investment has been much larger than the build in visible gold ETFs,” the firm writes.
The demand for bouillon is spiking due to many issues. “Political risks, in our view, help explain this because if an individual is trying to minimize the risks of sanctions or wealth taxes, then buying physical gold bars and storing them in a vault, where it is more difficult for governments to reach them, makes sense.”
The wealthy understand how to protect what they’ve worked hard for and gold is their preferred way to do so, at least right now. If you want to be truly prepared for anything, including the so-called apocalypse, then owning gold is a must. And for Goldman Sachs, that reality helps round out the already strong thesis for investing in gold.
When the world’s wealthiest people are in lockstep like this, there’s a reason why. And that’s because it works. If it didn’t, they wouldn’t be world’s “super-rich.”
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.