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How Will Gold And Silver Perform In A Recession?
We have had 20 recessions within the last 100 years. This comes out to one recession every five years on average, so it is not a matter of if we will have another recession but rather when we will have it. In this article we will explore how gold, silver, and oil perform during a recession. These three assets have been some of the most talked about commodities during the last couple of years.
Gold is a monetary metal and has traditionally been the asset of choice during periods of economic and political uncertainty. It is often identified as an inflation hedge but it is also a good safe haven investment. It has been used as money for over 5000 years and still has strong cultural ties in many countries throughout the world. During the last four recessions, gold increased in price, three times out of four and it barely made it in the red during the recession of 2001.
Silver is both an industrial metal and a monetary metal and its price performance is more dependent on economic activity. Silver is also much more volatile than gold. It has been known to stage huge rallies and make sharp corrections. During the last four recessions the price of silver was up in price two times out of four.
Invest in gold and recession proof your assets
One final thought about investing in gold: Because gold is a smart investment to protect against recessions, it can help keep your assets stable. Gold is actually a “hard asset” (meaning it has a physical form) so it tends to hold its value even as the market goes up and down. So, even if the worst thing happens and the market crashes, your gold investments would retain value and you have a better chance of not losing everything.
Buying and selling gold is a great way of diversifying your portfolio. Once you know what fits your needs better, getting some of your investments into gold form is a great way to round up your finances.
