The Price of Gold is Less About Gold & More About the Erosion of the US Dollar | Metals Mine

  • The Price of Gold is Less About Gold & More About the Erosion of the US Dollar

    From advisorperspectives.com

    When currencies are printed without limit, the role of gold becomes simple: Protect purchasing power. The challenge is that most investors do not fully grasp what that means. A simple illustration helps. Imagine a closed system with 100 individuals and 100 apples. Each person also holds one gold coin and one dollar, each of which has the same value: Each coin or dollar can buy a single apple. Now, magically, double the number of dollars. At first, everyone feels richer, but nothing real has changed. There are still only 100 apples. Over time, due to this printing of dollars, behavior adjusts and prices rise. An apple ... (full story)

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deaftrader
2 hr 51 min ago
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Gold's rise isn't always about increased demand for gold itself. Often, it's a reflection of declining confidence in the purchasing power of the U.S. dollar. In other words, gold isn't getting expensive and the dollar is getting cheaper.
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deaftrader
2 hr 48 min ago
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Interesting perspective. Many people think gold is getting more expensive, but in reality, gold often acts as a mirror reflecting the declining purchasing power of fiat currencies, especially the U.S. dollar. One ounce of gold still represents a store of value; it simply takes more dollars to buy it over time because inflation and currency debasement erode the dollar's value. This is why I see gold not just as a commodity, but also as a long-term hedge against monetary uncertainty.
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