U.S. Inflation hits 7 percent. Will gold act as a hedge against soaring inflation?

Inflation in the United States has reached 7%.

Will gold work as a hedge against skyrocketing inflation in the next few years, with U.S. inflation reaching 7%?

The cost of products and services in America is always fluctuating. The price rises have been significant, with them costing 7% more in December than they did last year!

The Federal Reserve has finally dropped the term “transitory inflation.”

Inflation in the United States increased by 7% in December, marking the ninth month in a row that inflation has been above 5%.

Housing and car prices continue to grow, with used-car dealers playing a big role in this trend. Costs for fresh food and electricity have also increased.

Will gold be a safe haven from rising inflation?


Gold purchased today should disclose its value in a few years as the US economy continues to be scrutinised and inflation takes hold.

While it may seem like an unusual investment to some, many people have found it to be a wise one.

In addition to gold’s other characteristics, such as its ability to hold value and liquidity, it is also an excellent inflation hedge, ensuring its worth in the future.

Gold mining businesses‘ stock values are already rising as investors recognise that gold may continue to grow.

Threats to the global economy


Because of all of these global economic risks, individuals are more ready to invest in something tangible like gold rather than paper currencies, bonds, or other assets that can devalue when inflation is strong.

Gold is also being bought in greater quantities by countries like China and India, who are looking to preserve their riches against inflation and currency swings.

Investing a portion of your assets in gold can help protect your wealth during inflationary times.

While there may be some market swings, if you buy gold at today’s prices, you are likely to see a significant return on your investment in a few years if inflation rates continue to climb at the current rate.

Gold has historically served as an inflation hedge, and with the global economy in such a state, now might be a good moment to invest.

by Rachel Buscall

by Rachel Buscall

Co-Founder & Managing Director at New Capital Link. Having started her career in the financial sector, Rachel demonstrated a natural flair for entrepreneurship.

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