A Guide on Using Gold to Hedge Against Inflation

As the global economic crisis looms, one can no longer ignore the predatory effects of inflation.

So how do you protect your wealth from inflation? How do you ensure that your money doesn’t lose its purchasing power and that you’ll still have financial freedom in the future?

One of the best options that has stood the test of time is to invest in gold bullion. The gold inflation hedge has protected average citizens from even the worst cases of hyperinflation.

Here’s how to hedge against inflation using gold bullion:

Convert Your Cash Into Gold

One of the first steps to take is to buy gold coins from an authorized dealer. Gold coins come in a variety of weights making it possible for the average consumer to begin their investment journey.

If you’re on a budget, you can start with buying gold coins that are 1/20th or 1/10th of a troy ounce. As you accumulate more cash, consider buying 1 troy ounce and 2 troy ounce gold coins.

A major advantage of gold coins is that they’re easy to protect and transport. Make sure you invest in a capsule for each gold coin and that you keep them in an RFID-protected pouch.

It’s up to you to decide how much gold you’ll need to hedge against inflation. Many investors have suggested 10% as the ideal amount. Others have suggested that you should own your “age in gold” in troy ounces. With this scenario, you should own 1 troy ounce of gold that corresponds with your age.

Protecting Your Gold

The next step on how to hedge against inflation using gold is to protect your gold. This is, sadly, often overlooked by many investors and can cause them to lose their savings.

You have to expect that as inflation looms, crime will rise and others will want to seize your gold bullion. It’s always best to keep some of your gold coins at home in a safe or vault.

You should keep another portion of your gold bullion in a vault outside of the banking system in your country. If you can, put another portion in another country. Again, make sure that it’s kept in an offshore vault outside of the banking system.

Banks are beholden to governments and are often willing to hand over your gold in the event of a mandated confiscation. In the event of emigration, there’s always the possibility that your gold will get confiscated by airport security or border guards.

Make sure you have backup plans in case your gold gets confiscated from one area.

Hedge Against Inflation With Gold

Now you know how to use gold to hedge against inflation and protect your wealth. As inflation looms, now’s the time to stack up on gold before it’s too late!

Make sure you stick to gold coins as these are easy to protect and transport. Allocate at least 10% of your portfolio to gold or consider owning your age in troy ounces of gold.

Next, make sure you have several options to protect your gold. Keep them in vaults outside of the banking system. Keep your gold in your country and in an offshore jurisdiction.

You can find more advice on different inflation hedges on our blog!

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