Haven assets: Is it a good time to invest in gold?
Gold, par excellence used in the financial market as a refuge asset, is being strongly impacted by the recent measures of the European Union that prohibit imports of this precious metal from Russia. This measure has caused a drop of almost 17% in its value, generating anxiety among investors, so the question arises: is gold a refuge asset today?
A year with concern about possible recession
2022 has been a year with shocking events that have raised concerns about a global recession. This concern has led many investors to take shelter in the well-known haven assets, not to mention that gold could be affected by the conflict between Ukraine and Russia, which has generated, among other things, a global inflation that has taken a 180º turn in the consumption habits of citizens, who are becoming more cautious with their spending every day.
However, this drop can have many causes. Among them, the growing competition that the US dollar is giving. This currency has, for the first time in 20 years, exceeded the value of the euro, which also affects the precious metals market, causing investors to seek to move their financial capital to the currency that offers more security at the moment.
Are gold mining stocks an opportunity?
Historically the performance of gold mining share prices following periods in which the price to earnings paid by the American stock exchange was, statistically speaking, very high, has been excellent and a opportunity as we are going to analyse below.
Experts offer inaccurate predictions about the future of gold
With a year so fluctuating across the board, predicting how gold will perform in the coming months is challenging. This is what experts on the subject say, who affirm that traditional behaviors cannot be predicted when the previous behavior has been anything but traditional.
Other experts assure that it is a cyclical behavior that will lead gold to a rebound before closing the year and that it continues to be an excellent form of investment for staggered times, in order to get the most out of it.
Although gold has been characterized by recovering after these declines, it cannot be determined if this will be the lowest of its value and the concerns among investors may be one of the causes of an even more abrupt decrease, since they can increase the supply drastically and since there is not such a high demand for these fluctuations, its value will decrease.
The question then remains: is it a good time to invest in gold?
Currently, investing in gold has its risks, like any investment and, although historically it has recovered over the months, it is awaiting future measures that can affect its value.
Is Bitcoin a store of value like gold?
For some time now many analysts have been saying that Bitcoin is or will be digital gold. However, such a statement carries with it a great responsibility for this asset: to occupy a place like that of metal as a store of value.
Is gold a good safe haven?
The first asset we think about when it comes to protecting our wealth, in a situation where the economy has entered a recession and the central banks are flooding the markets with liquidity, is usually gold.