Gold supply is getting overwhelmed by demand.

Why Gold Matters More Than Ever

People often wonder why there is so much focus on gold. While it may seem like gold is constantly in the conversation, it’s actually just a fraction of the content. However, the reason gold keeps coming up is simple: it’s a highly undervalued asset, and many people are underexposed to it. Gold serves as an important hedge against economic uncertainties, and it is worth considering more seriously as part of your portfolio.

Central Banks Are Buying Gold in Record Numbers

In the first half of this year, central banks around the world have purchased 483 tons of gold. This is a huge number when you consider that the global production of gold is about 3,000 tons per year. In fact, gold production is expected to decline as gold reserves become harder to find. With such large quantities being bought by central banks, about 1,000 tons could be taken off the market this year. This leaves less gold available for regular investors, which could make it more valuable in the future.

What Happens When Everyone Wants to Buy Gold?

It’s important to realize that only a small fraction of countries and funds are buying gold right now. Out of nearly 200 countries, only a few dozen are actively purchasing gold. Imagine what could happen if more central banks, mutual funds, and family offices start investing in gold. The demand could skyrocket, driving up the price even further. In countries like India and China, gold has always been valued, but in much of the rest of the world, it hasn’t been seen as a necessary asset. That mindset is slowly changing, and gold is being rediscovered as a valuable investment.

The Impact of the 1971 Shift

In 1971, U.S. President Richard Nixon removed the link between the U.S. dollar and gold. Before this, the U.S. dollar was backed by gold, giving the currency a strong foundation. When that connection was cut, people began to see gold as less important. For the past 50 years, many have been led to believe that gold is a useless asset, with no dividends or real benefits. Yet, in reality, gold has outperformed many investment options, including some equity funds managed by top professionals.

Gold as a Hedge Against Currency Collapse

One of the biggest benefits of gold is its role as a hedge against currency collapse. If you have assets that are not based in U.S. dollars and your currency loses value, gold can be a reliable store of wealth. It doesn’t lose its value like paper currency can during times of economic crisis. This is especially important in times of uncertainty when currencies around the world can fluctuate wildly due to political or economic reasons.

Why You Should Consider Gold

If central banks are buying gold in large quantities, it’s worth asking yourself: Why aren’t you buying it too? Central bankers have access to more information and resources than the average person, so when they start making moves like this, it’s a signal that something big could be happening. Gold may not give you dividends or interest, but it provides something far more valuable in times of crisis: security. So, it’s time to consider whether gold has a place in your investment portfolio.

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