Gold an investor’s ‘haven’ in times of crisis

Investors have flocked towards gold as markets continue to battle volatility in the form of lasting COVID-19 impacts, rising inflation and high energy and food prices, according to Rush Gold.

Jodi Stanton, CEO of the mobile app business that allows customers to buy and sell physical gold, said analysts have struggled to predict what will happen in the market, but the gold price has bounced back in the wake of the Ukraine-Russia crisis.

“On Friday, the price of gold opened strongly, and despite a slight downturn is still sitting at a higher price of US $1900 per ounce (AUD $2676),” she said.

“The appeal of gold in times of crisis has not changed for 4,000 years. What has changed recently is that technology is now driving the way investors can trade gold, increasing their ability to secure it and transfer it almost instantaneously without having to use a broker.”

Stanton also highlighted the growing trend of considering Bitcoin as a “hedge” against volatility and whether this shares any similarities with the role of gold.

“We’ve always been of the view that gold and Bitcoin serve entirely different functions, and this is being borne out in markets, with Bitcoin correlating to riskier assets like shares and gold showing clear hedging and capital preservation traits in times of turmoil,” she said.

Stanton said the increasing digitisation of the economy has also opened up gold to new raft of retail and wholesale investors, despite sophisticated investors already having the asset as part of their portfolios.

“The next period is going to be a time of learning and adaptation as the world grapples with yet another geo-political crisis in a digital economy.

“The one thing that can be determined though, is gold as a currency has already weathered every single crisis down throughout history, but this time with the added benefit of being recently modernised to suit the current climate.

“With unparallel accessibility and liquidity, the world’s oldest trusted currency is now the newest,” she said.