The problem is that, during a stock market crash, virtually all assets lose value. However, gold and other precious metals almost always rise, making them a better option than many other investments. Interest rates play an important role in gold prices due to a factor called opportunity cost, the concept of giving up an almost guaranteed profit on a particular investment in exchange for potentially more significant growth in another investment. Gold miners are interesting because they can be valued by discounting the future earnings of gold miners.
However, I do believe that in a relatively short period of time, we could see gold react negatively to a very aggressive Federal Reserve and this could cause gold to fall significantly. We are seeing that the difference between gold and those currencies is widening significantly, which may indicate that the value of the JPY or CHF could appreciate rapidly or that gold could depreciate significantly. An investment in physical gold, gold stocks or funds is an excellent hedge against inflation and a portfolio diversifier. The lesson here is that, even if gold initially falls during a stock market crash, it should not be taken for granted that it has fallen for the recount.
We must consider the possibility that this will happen again and that citizens will be attracted to gold for reasons other than the performance of S%26P. If you think the stock market will crash in the coming years, you may want to consider investing in more gold. This article is intended for those who want to protect themselves against the possibility that the Federal Reserve will succeed (at least in the next 3 to 6 months) and reduce inflation much faster than market participants expect, which would be very negative for gold. It's a safe investment option for squeamish investors, as it has a history of surviving stock market crashes.
Since gold mining prices are much more likely to rise than to fall in the future, gold mining stocks should also be more sensitive to the price of gold. The imminent threat of higher inflation rates means that investors must be careful with their strategy and focus on gold investment products. Rural demand plays an integral role in the demand for gold in a country that depends primarily on monsoons for a high-yield harvest. For example, India's annual gold consumption is at least 800 tons, and rural India accounts for 60% of this consumption.