Gold has always been a safe investment in times of uncertainty. However, since the Covid-19 crisis, combined with a rising dollar and rising interest rates, the gold sector has been abandoned by investors.

Currently, and particularly since the beginning of 2022, central banks have increased their gold holdings. 

Moreover, the volumes of purchases made this year have reached record levels compared to previous years. 

Gold reserves: a performing asset in times of crisis

Gold is a precious metal that is considered a trusted asset because it is physical. Thus, buying gold is a way for Central Banks to secure their reserves.

Indeed, while currencies and other assets have only a virtual value that can collapse, gold remains a product that keeps the same value in any country of the world.

Similarly, at the global level, there are several events that can cause markets to fall: the Covid-19 pandemic, inflation, geopolitical tensions, etc. 

Nevertheless, the price of gold always performs well because of the great confidence that is placed in it.
Even better, its value can be supported by these events (or crises) which will also increase its price. 

Moreover, by gathering a stock of gold, Central Banks can therefore build up a safe haven, especially when currencies lose their value significantly in times of crisis.

In principle, gold does not earn interest or money.

However, its qualities as a precious metal systematically give it a certain value on the market. 

Gold is particularly resistant and tends to be increasingly rare. What is more, it does not deteriorate over time, but rather increases in value.

Even though the redemption price of gold in grams varies continuously, it remains high, regardless of the country.

The yellow metal has been considered one of the most valuable and therefore most sought-after reserves since ancient times. Gold is rightly described as a safe haven par excellence, as its price is intrinsic, unlike banknotes and other assets which can fall.

Investing in gold: towards an evolution of the precious metal on the financial market ?

Investing in gold allows you to invest your money in a stable asset that is recognised as a hedge against inflation. The value of gold is recognised worldwide, and its future is not threatened because states still rely on this asset to determine the wealth of a country. This funding can be achieved through the purchase or sale of modern gold coins, bullion or bars.

Similarly, gold has long been known as a global currency, store of value and medium of transaction.

As such, it is considered one of the most obvious and certain investments to diversify an investment portfolio. 

It should also be noted that when the market is going through turbulence, this yellow metal could represent a safe investment.

Furthermore, with high inflation, tightened monetary policy and economic uncertainty, the yellow metal is playing its protective role as a safe haven.

This makes the precious metal even more interesting for individuals who want to invest in these risky times. 

Not only is gold not negatively impacted by inflation, but it also benefits from the following mechanism: when inflation rises, real interest rates (interest rates minus inflation rates) fall, which causes the price of gold to rise.

However, it is an investment that should be made over the long term, as it is over time that gold holds up better than some other assets. 

Gold could therefore be a way to fund your financing portfolio in times of uncertainty such as the one we are currently experiencing. Because of its negative correlation with other investments, gold can be used to balance investments in times of crisis.