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- March 16, 2021
Home » Free Your Money » Is It Smart to Buy Gold Right Now?
Once upon a time, people used metal coins to exchange goods and services. But I’m not talking about the dimes, nickels, quarters and pennies that jingle annoyingly in America’s pockets today. I’m talking about the two most famous precious metals: silver and gold.
Silver and gold have been the standard for money for thousands of years. Their popularity and wide applications have solidified their place as the most used and widely accepted currency in the history of humankind.
Today however, people trade in paper bills that have no inherent connection to these metals we once dealt with. What happened? When did money turn from precious metals into green pieces of paper with numbers written on them? Is this change a bad thing?
Is it smart to buy gold right now?
Table of Contents
Origin of Money
The topic of money is one that can easily confuse people, but this isn’t by accident. Governments and government-controlled institutions use fancy terms and lofty expressions to turn easy money management into a disaster- just ask anyone in the banking regulation industry.
To put it simply, money is a form of advanced bartering. When you go into the market to buy or sell something, you trade your objects for another product (or service). Because you probably don’t have exactly what the other person wants to trade for, you use a placeholder: money.
People accept money through barter because they can trade that money for what they’ll need later.
People have varying wants and needs, so everyone values objects differently. But since people all around the world recognize silver and gold as valuable, it becomes the most popular medium of exchange. Its universal recognition of value is what sets it apart from all other forms of money.
Still confused? Think about how inmates in jail successfully use cigarettes as money. Cigarettes are typically the same size and quality, are inherently valuable (smoke it to get a buzz), and are effectively divisible; 20 come in a pack. Even if you don’t smoke yourself, cigarettes are still valuable to you. You can trade the cigarette to someone else who does smoke. Because both parties would rather have what the other person has, both people come out benefitting on each side. It’s a win-win situation!
Me to the cashier at Target
Gold is Unpopular... For Now
Gold and silver are less popular nowadays, and are mostly looked at as “safe-haven assets”. This means some people still own gold and silver, but they probably have it hidden on their property somewhere. When the economy shows signs of distress, people flock to these assets because times are uncertain. The only thing that IS certain in hard times is the value of gold and silver as money.
Unfortunately, the dollars we use today have no resemblance to these precious metals. The “money” we use now isn’t how money used to work.
A bill from 1922, redeemable for 1 ounce of gold at the bank
In order to have a successful currency, the money you use must have inherent value. Fiat currency is devoid of any inherent value! Actually, that’s not true. You can burn money and it can keep you warm, just ask Pablo Escobar.
Fiat money is a government-issued currency that is not backed by a commodity such as gold. Fiat money gives central banks greater control over the economy because they can control how much money is printed. Most modern paper currencies, such as the U.S. dollar, are fiat currencies.
But gold and silver is burdensome to carry around in your pockets. To solve this, banks would pass out paper dollars to represent the gold you had stored at the bank. If you had a $20 bill, you could go to your bank and exchange it for $20 worth of gold. But those are the days of the past.
In 1944, the US convinced world leaders to “peg” their currency to the US dollar, which was then attached to gold. For non-Americans, this was the same thing as redeeming your Euros for gold, but with extra steps. Things seemed to be going smoothly.
Everything changed in 1971, when the US sent the world for a loop– the US government passed a law saying you can no longer redeem your dollars for gold.
Since they were no longer legally obligated to vault a certain amount of gold based on the number of dollars in circulation, they kept the money printer going overnight. This allowed the government to spend unlimited amounts of money on anything and everything.
To say that federal spending has spiraled out of control since then is a drastic understatement.
Why Can’t We Print More Money?
The laws of supply and demand determine the value that any one object can hold. Gold and silver are hard to come by, which contributes to their value as money. Other metals, while valuable *in their own special way* can be found all around the world, making them less valuable as money.
US dollars, already without inherent value, continue to decrease in value with every spending bill that politicians pass. Some call this the inflation tax; the more dollars that are printed into circulation, the less valuable dollars become, and the more expensive goods and services become.
The inflation tax doesn’t show up on your W2 tax form. It’s an invisible tax that slowly erodes the amount of items you can buy with a $100 bill year over year. It’s the reason we can’t buy a giant bag of Swedish fish at the corner store for only a couple of dimes like our grandparents used to.
A Convenient Analogy
Money printing has become increasingly popular since the 2008 financial crisis. And the government has to increase its rate dramatically to keep the economy’s head above water.
Imagine the economy represented as a person’s body- the market is filled with buying and selling of goods and services, and it happens automatically, like breathing. When we suddenly don’t feel so great and we’re short of breath, we either wait for our body to fight off the infection, or we stimulate our body with medicine to induce a reaction to make us feel better. If after a couple days we still don’t feel good, we take more medicine.
When we decide to take the second round of medicine, we aren’t letting our body fight off the infection naturally, so our immune system weakens. The next time we get sick now, we’re going to rely on the medicine to keep us from becoming gravely ill. At what point do we break away from the medicine and work on improving our natural immune system again?
Who gets to decide if we need more medicine?
This is no different from describing the current health of the US economy. And it’s gasping for air.
Consequences of Money Printing
The US economy has been on life alert since 2011 when the Federal Reserve told us that we only need to take the medicine this one time to jump-start our economy. As of this writing, Congress is about to pass a $1.9 TRILLION dollar stimulus bill to add to our $28+ TRILLION in debt!
Speaking of, the enormous size of the US National Debt is the result of reckless spending on money-sucking government programs. Nobody talks about paying the debt back, because it will never be paid back. It will be inflated away by the insane amount of money the government prints (along with your debt too!)
To demonstrate the size of this monstrosity, if you were to time travel 1.9 trillion seconds ago, you would be taken back to roughly 60,200 BC! For those of you who got a D in history, this is before the Egyptian pyramids, before cave drawings, and even before the Stone Age when pointy sticks were made!
To get the size of “our” debt, remember to multiply this figure by 28!
So why hasn’t the price of gold and silver gone up according to the amount of money being printed? After all, assets rise in price as inflation starts creeping up… right?
Government and government-run banks suppress the prices of gold and silver so that people don’t panic when they see its price creeping up. The price of gold and silver in terms of US dollars is a fraction of what it should be! Inflation has been cleverly manipulated to be portrayed as lower than what reality is.
The way we measure inflation in the US currently is by a metric that the government uses called the Consumer Price Index, or CPI for short. The CPI is supposed to track the amount of money it takes to buy essential goods and services. What is interesting to note however is that the CPI number conveniently excludes food and energy costs, citing that those prices are “too volatile”. Humans need food to survive and need energy to productively live their lives, so what is the real reason that these metrics have been edited out of the CPI?
Is it smart to start buying gold right now? You tell me.
What Should We Do?
It’s time to start building wealth with real money. Only by controlling our money can webecome free and independent.
It’s time to buy silver and gold.They’re ourtickets to freedom!
We are looking at the opportunity of a lifetime here. Not only can you rest assured by investing in what have been the safest assets in all of recorded history, but you’re also investing in metals that have explosive upside potential! It is quite literally the least risky move you can make, and simultaneously the greatest discount on precious metals we will ever see.
How Can I Start Investing in Gold Right Now?
It’s not too late to start investing in precious metals, but time is running out.
It’s worth mentioning at this point that there are different strategies for investing in gold and silver.
Silver is more volatile than gold, and is therefore slightly riskier: it rises higher (percentage wise) than gold in economic hardships, but sinks lower than gold(percentage wise)in a booming economy. If you are young and looking to take risks (like me) silver is the go-to.
I’ll describe a couple ways you can start investing in precious metals today.
1. Investing in gold/silver mining companies
This is the riskiest, but also highest potential upside to profiting off of what will be a dramatic rise in gold and silver. These companies’ assets are literally in gold, silver, and mining equipment- it’s hard to go wrong investing in these companies. The high upside potential is the gold and silver mines that have yet to be touched.
Companies only mine gold and silver when it’s profitable to do so. When the demand for gold and silver explodes north, these companies will be the ones diving head first into the ground, satisfying their worldwide customers.
If you want to put money in mining companies but don’t want to invest in singular companies that take constant management, take a look at the mutual fund EPGFX. You won’t regret it.
2. Buying physical gold and silver to be held by a third party
This strategy appears to be the best when considering the gold-to-silver ratio. The gold-to-silver ratio is simply the amount of ounces of silver it takes to buy one ounce of gold. Within the past year, when silver was as low as $12/ounce, the GSR set an all time record at over 120! That means that it would take 120 ounces of silver to pay for 1 ounce of gold. Silver was extremely undervalued. Today, the GSR has been hovering around 65-70. If you bought silver when it was $12/ounce, the amount of gold you could buy with it has effectively doubled.
If you have your metals stored in a third party vault, it makes it extremely convenient to exchange your silver for gold (or vice versa), should the GSR continue to plunge. This is one of the more involved methods of trading precious metals, but there is still money to be made here.
3. Buying coins and bars
This is the safest method of owning precious metals, simply for the fact that you know exactly where it is (hopefully buried in your backyard or in a heavy-duty safe somewhere hidden).
One thing to beware of when purchasing silver or gold is collector coins/bars. This is much more costly as opposed to straight bullion, or coins. We don’t care about what edition the coin is or whose face is on the front- we just care that it’s .999 (99.9%) silver or gold bullion.
Buying physical silver coins has recently become popular, so if you desire the real thing in your hands, you should act fast. APMEX has already begun to see shortages of silver coins. Another place to check out is SchiffGold.
Additionally, coin collector stores near you should have what are called “constitutional” coins. These are coins that were made before 1965, which contain 90% silver. The appeal of these coins is ease of use and convenience. Look at reviews of the coin shop you’re visiting to make sure you are buying from a reputable dealer.
I know I’ve put a lot on your plate, and it may be hard to digest at first. If you need to, read through it again tomorrow and things will become more clear to you. It surely took me more than reading one article (more like hundreds of articles over several years) to be able to understand and convey this information to you.
To alleviate some scrolling, I’ll break down what you just read into bite-sized pieces:
- Money is a form of advanced bartering
- Gold and silver have the longest track record of being stable money in human history
- Most people worldwide trade in fiat currency, which is effectively worthless
- To add insult to injury, the US has printed massive amounts of dollars since 1971, and especially the last decade, making the dollar more worthless than it already is due to inflation
- The price of gold and silver hasn’t even begun to scratch the surface of the amount of dollars in circulation, setting up potential for massive gains in the future once the true value of silver and gold is realized in dollars.
- Investing in gold and silver is easy. Simply buy stock, have a third party hold your metal for you, or buy some bullion coin to hoard.
Simply put, its smart to start buying gold and silverright now
P.S. I’m not a financial advisor. Tread at your own risk 🙂
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Should I be buying gold right now? ›
According to GoldSilver, an online precious metals dealer, the best times of the year to purchase gold are in early January, March and early April, or from mid-June to early July. These conclusions stem from GoldSilver's analysis of the average performance of gold for every day between 1975 and 2021.Is investing in gold a good idea in 2023? ›
As a rare and valuable resource, gold retains its value over time, even amid economic uncertainty and market volatility. In 2023, this perception of gold as a safe investment option remains strong as investors seek ways to protect their net worth against inflation and other financial risks.What is the best time to buy gold in 2023? ›
- Pushyami 2023.
- Makar Sankranti – 14 January 2023.
- Ugadi or Gudi Padwa – 13 April 2023.
- Akshaya Tritiya – 22 April 2023.
- Navratri – 15 October 2023 – 24 October 2023.
- Dussehra – 24 October 2023.
- Diwali/ Dhanteras – 10/ 14 November 2023.
- Balipratipada – 14 November 2023.
Gold is considered a safe investment. It is supposed to act as a safe haven when markets are in decline, because the price of gold typically doesn't move with market prices.Will gold price go down in 2023? ›
As interest rate hikes are likely to continue well into next year, gold prices are projected to fall by 4 percent in 2023.”What is the downside of buying gold? ›
Potential long-term performance lag: While gold might outpace other assets at times, it might not hold up as well to long-term price appreciation. If you're trying to save for retirement, for example, then putting too much money into gold could hold back long-term gains if gold lags stocks.Will gold skyrocket in 2023? ›
After underperforming for much of 2022, gold rallied late in the year and through the first month of 2023. More specifically, the price of gold increased by 14% from November 2022 through February 8, 2023. The price uptick may be attributed to less aggressive messaging from the Federal Reserve regarding interest rates.What will gold be worth in 5 years? ›
Gold price predictions for next 5 years: experts' analysis
The banking group saw the precious metal trading at $2,000 at the end of 2023, accelerating to $2,075 by September 2024.
Consequently, conventional wisdom recommends holding no more than 10% of your portfolio in gold as part of a well-balanced portfolio. Allocating a slice of gold to your portfolio may help to hedge against inflation. That's because gold has an inverse relationship with the dollar.What time of year is gold cheapest? ›
Best Month of the Year to Buy Gold
Since 1975, the gold price has tended to drop the most in March. The daily chart above shows April might offer a slightly lower overall price, but history shows March is the month gold falls the most and is thus one of the best times to buy.
What months are best to invest in gold? ›
As such, the best months and times to purchase gold are usually January, March, early April, mid-June and early July. You can easily start exploring your gold investment options now.Should you buy gold bars? ›
Although the price of gold can be volatile in the short term, it always has maintained its value over the long term. Through the years, gold has served as a hedge against inflation and the erosion of major currencies, and thus is an investment well worth considering.Will gold be worth anything if the economy collapses? ›
It's important to remember that gold and silver hold their value under a collapsing currency, so it's best to keep your holdings in precious metals until the need arises.Will gold crash when the market crashes? ›
The problem is, during a stock market crash, practically all assets fall in value. However, gold and other precious metals nearly always rise, making them a better option than many other investments.Should I keep my gold or sell it? ›
The best rule of thumb is to retire your gold when you are in need of extra cash. Gold that sits in a drawer or safety deposit box for years and years might not make you any more money by waiting, and actually might cost you more money in the long run.What is the outlook for gold in 2023? ›
Gold price stood at $2,010.90 per troy ounce
04/18/2023, Tuesday, 12:30 am CT. According to the latest long-term forecast, Gold price will hit $2,500 by the middle of 2025 and then $3,000 by the middle of 2028. Gold will rise to $3,500 within the year of 2030 and $4,000 in 2032.
Silver is more volatile, cheaper and more tightly linked with the industrial economy. Gold is more expensive and better for diversifying your portfolio overall. Either or both may have a place in your portfolio.Has the price of gold gone up in the last 10 years? ›
What is the price of gold over the last 10 years? It has ranged from $1,049.41 to $2,067.16 per ounce and has produced a 22% return in the last 10 years.Is it better to buy gold coins or bars? ›
Gold coins are known to have more sentimental value than gold bars both historically and culturally. Simply put, gold coins can be more ideal for you than gold bars if you want to invest in something with a more historical and cultural value. Again, gold coins have more collectible value than gold bars.Should I own physical gold? ›
Physical gold is one of the best forms of long-term wealth protection. It is ideal for your heirs since it will outlast any currency they may use in the future. Physical gold is not subject to the risks that come with paper assets. It can't be hacked or erased.
Is it smart to own gold bars? ›
It's a good hedge against inflation
Gold and other precious metals have long been considered a smart way to fight inflation. That's because it tends to hold its value — and preserve your purchasing power — over the long haul, despite fluctuations in the dollar.
It is possible that the price of gold could make a 1,000% move in the next ten years from its 2020 price. That could put the price of gold at $17,000 by 2032.Is Barrick gold a good buy? ›
Barrick Gold Corporation's analyst rating consensus is a Moderate Buy. This is based on the ratings of 10 Wall Streets Analysts.How much gold can you get for $1000? ›
Historical Exchange Rate Graph for USD to GOLD
The conversion value for 1000 USD to 42973785.991 GOLD. BeInCrypto is currently using the following exchange rate 42973.786.
You can buy gold bars from dealers, individuals or online from sites like JMBullion, the American Precious Metals Exchange (APMEX) or SD Bullion. And keep in mind that you may be on the hook for delivery fees—plus insurance—to assure the safe transport of your bullion.How much will a 1000 gold be worth in 10 years? ›
At the time of writing, the 10-year increase is 55.67%. This means that if you invested $1,000 in gold 10 years ago, it would be worth $1,550 today. Additionally, reviewing the pricing trends for 2020, you can see that gold prices spiked during the global pandemic as investors favored commodities over stocks.Are you taxed on selling gold? ›
You will need to pay capital gains taxes when you sell your gold. Depending on how long you have held the gold for, you will be subject to short-term capital gains tax (STCG) or long-term capital gains tax (LTCG).How much gold can you legally own in the US? ›
Physical gold. According to the CBDT's most recent circular, men, regardless of marital status, are only allowed to possess 100 g of real gold in the form of jewelry and ornaments. Married women are allowed to possess 500 g, unmarried women 250 g, and men 500 g.How much is too much gold? ›
However, many experts warn that you should be wary of how much gold to include in your portfolio. One rule of thumb is to limit gold to no more than 5% to 10% of your portfolio. Depending on your situation and your risk tolerance, you might be more comfortable with a bigger or smaller share of gold in your portfolio.How to invest in gold for beginners? ›
How do beginners invest in gold? Mutual funds and ETFs are generally the easiest and safest ways to invest in gold. Each share of these securities represents a fixed amount of gold, and you can easily buy or sell these funds in your brokerage account or retirement account.
Does gold go up in value everyday? ›
The price of gold fluctuates based on a combination of supply, demand, and buyer perceptions and behavior. But, unlike paper money, the gold supply doesn't change much over time, so its value is relatively constant.How much is a 1 oz gold eagle today? ›
|$ 1 - $ 136,999||$ 2,126.65||6.50%|
|$ 137,000 - $ 342,999||$ 2,122.32||6.28%|
|$ 343,000 - $ 684,999||$ 2,119.43||6.14%|
|$ 685,000 - $ 1,368,999||$ 2,116.55||5.99%|
An experienced investor will build a position in commodities after periods of market weakness. As June closes, we see the end of seasonal weakness for gold, which will enter its historical prime time from August to October. Since 1975, the second quarter of the year has been gold's worst.How do you know when to invest in gold? ›
Gold is usually seen as a safe haven for investors in times when other markets and economies are facing challenges, and during inflation, gold is seen as a hedge against it— when inflation begins to outpace interest rates, investors seek to put their money in more stable investments.What date is best to sell gold? ›
The best time to sell gold is when the spot price of gold is high and you're comfortable with the idea of selling your gold coins, jewelry, bullion or other gold items. Gold, like other commodities, constantly fluctuates in value.What is the best form of gold to buy? ›
For us, the best type of gold to buy is physical gold bullion. The precious metal has been loved for centuries as a safe haven in which to grow and store wealth and physical bullion best reflects these qualities today.How much should I pay for a gold bar? ›
Gold bars are priced by weight, typically ounces or grams, and this price is also affected by the market. As of Feb. 23, 2023, the price of 1 gram of gold is $58.62 whereas a gold bar that weighs a kilogram would fetch close to $60,000.What happens to gold if US dollar collapses? ›
Gold, Silver, and Other Precious Metals
Precious metals can't be printed like paper money, which makes them a good hedge against economic collapse. Since their supply is limited, the value of gold and silver holds better over time.
When the stock market crashed in 1929, the well-to-do rushed to convert their bank funds to more reliable gold bullion. This left the government without enough gold to back newly printed money. Therefore, President Franklin Roosevelt used his executive powers to make it illegal to own gold coins or bars.Can the government seize gold? ›
Under current federal law, gold bullion can be confiscated by the federal government in times of national crisis. As collectibles, rare coins do not fall within the provisions permitting confiscation. No federal law or Treasury department regulation supports these contentions.
Does gold go down when inflation goes down? ›
Inflation typically has an indirect impact on the prices of commodities like gold. As prices rise across the economy, investors may buy more gold and other precious metals to preserve the purchasing power of their dollars. In the first half of 2022, for instance, demand for gold increased 12% year over year.Will gold go up if stock market goes down? ›
This is why gold can be a safe-haven investment: The returns on gold versus stock tend to be inversely proportional, which means that when stock prices fall, gold prices tend to rise.Is gold price in a bubble? ›
Some people believe that gold was in a speculative bubble in the second half of the 2000s, which burst in 2011. The problem with detecting bubbles in the gold market is that gold has no yield, therefore it is practically impossible to assess gold's fundamental value.
As a rare and valuable resource, gold retains its value over time, even amid economic uncertainty and market volatility. In 2023, this perception of gold as a safe investment option remains strong as investors seek ways to protect their net worth against inflation and other financial risks.How hard is it to sell gold? ›
Gold bullion is the most popular type of gold to hold as an investment or store of value, as it's generally easy to sell, and maintains its value well. When we're talking about selling gold, you can also get a good amount of money by selling gold wedding bands, engagement rings and other types of jewelry.How much do you lose when you sell gold? ›
When you sell gold coins or bars, you should expect to receive at least 90% to 95% of the current market value. But with gold jewelry, you're likely to get only 70% to 80% of the melt value.Will gold price go up in 2023? ›
After underperforming for much of 2022, gold rallied late in the year and through the first month of 2023. More specifically, the price of gold increased by 14% from November 2022 through February 8, 2023. The price uptick may be attributed to less aggressive messaging from the Federal Reserve regarding interest rates.Is gold in high demand right now? ›
Demand for gold reached its highest level in more than 10 years in 2022 as rising central bank interest rates and worries over the global economy pushed investors toward the precious metal, according to the World Gold Council.What will price of gold be in 10 years? ›
Gold price stood at $2,017.70 per troy ounce
According to the latest long-term forecast, Gold price will hit $2,500 by the middle of 2025 and then $3,000 by the middle of 2028. Gold will rise to $3,500 within the year of 2030 and $4,000 in 2032.
Eric Strand, manager of the AuAg ESG Gold Mining ETF, said last month that 2023 would yield a new all-time high for gold and the start of a “new secular bull market,” with the price exceeding $2,100 per ounce.
Why is gold dropping? ›
When the supply of gold is low, and demand is high, the price will rise. Conversely, when the supply of gold is high, and demand is low, the price will fall. Additionally, other factors like interest rates, inflation, currency value, geopolitical events, and economic conditions can have an impact on gold prices.What's the highest gold has ever been? ›
Due to its reputation for being a safe-haven asset, gold tends to perform well during a recession. For example, when the stock market collapsed in 2007, investment demand for gold spiked and continued to rise, and gold doubled in value between 2007 and 2011.Should I invest in gold bars? ›
Although the price of gold can be volatile in the short term, it always has maintained its value over the long term. Through the years, gold has served as a hedge against inflation and the erosion of major currencies, and thus is an investment well worth considering.Who is buying gold right now? ›
Countries Are Buying Up Gold
After all, countries like Turkey, China, Russia and Poland are reportedly buying up huge amounts of gold. They're also worried about inflation and geopolitical conflict.
After being released from government control, gold reaches a new record price on January 14, 1980, exceeding $800 an ounce. Gold is scattered sparsely throughout the earth's crust and since ancient times has been treasured for both its scarcity and metallurgic properties.What is the prediction for the price of gold? ›
Gold rate prediction for tomorrow is 6106 INR for 1 gram 24 carat gold with negligible change of 0.304%, here you can check highest & lowest tomorrow gold rate and plan your investment accordingly.