Gold Demand Surges in Wartime
(and war threats are spreading by the day!)
“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
— Ernest Hemingway
Bombs have been falling all over the place this year.
In Iran, Yemen, the Gaza Strip, Syria, Ukraine, Israel, Russia, Lebanon, the West Bank, as well as Iraq, Sudan, Myanmar, and the Democratic Republic of Congo. Nor can we overlook Thailand and Cambodia bombing one another.
The rubble is still bouncing in some of those places as we write, while threats of attacks and counter attacks are flying all around the globe.
Trump issued a cease-fire ultimatum to Russia the other day, to which former Russian president and prime minister Dmitry Medvedev responded, “Each new ultimatum is a threat and a step towards war. Not between Russia and Ukraine, but with [Trump’s] own country.”
Trump warned that Medvedev was “entering very dangerous territory!”
Medvedev warned that “Russia isn’t Israel or even Iran.”
And so it went.
These are among the conditions that have conspired to propel gold to new all-time highs.
It is no surprise that gold demand surged in Iran during the second quarter of the year, thanks to the “12 day war” with Israel and the US. Gold sales jumped 20 percent over the same quarter the year before. Iranians stocked up on earrings, pendants and other types of bling. Oh, well. Gold is gold. In times of desperation even gold jewelry and silver tea sets are prized for their precious metals content. But it makes much more sense, as we recommend at Republic Monetary Exchange, to invest in gold and silver coins and bars, items of known quality and weight, that don’t have to be assayed or melted down, and don’t carry the additional mark up of fabricated gold or silver.
But gold is gold, and we’re sure that people besieged with war will be glad to have gold in any form.
“Iran was the outlier. Consumers bought gold jewelry as a proxy investment, pushing demand in the quarter up 12 percent year on year,” said a WGC analyst. “Gold recorded a remarkable 26 percent appreciation in the first half of the year in dollar terms, outperforming many major asset classes.”
We spend a great deal of digital ink on describing the latest developments on the monetary and fiscal fronts, but the escalation of war threats is enough to remind us that gold is the wealth protection haven par excellence in time of chaos and war.
No wonder central bankers and smart investors are buying gold. Speak to us about protection and profit with gold in times of increasing warfare.