French women and men feel it in their daily lives: their purchasing power is decreasing. The health crisis added to the geopolitical instability, in particular with the Russian-Ukrainian war, have had an effect on the economic situation in France as well as in the rest of Europe, and even the world.
While it is still too early to speak of a crisis, inflation is, on the other hand, definitely present. After 4.8% in April and 5.2% in May, consumer prices increased by 5.8% in one year in June 2022, according to final figures from INSEE.
This price increase is not insignificant, it is the highest level of inflation in France since November 1985. From now on, it is felt on each of the daily purchases. In this situation, you may be wondering where to invest to protect your savings. Precious metals are one of those safe havens that can sometimes attract some investors.
For Serge Belinski, investment advisor and founder of the website L’Investisseur Français, precious metals can form an interesting refuge. To illustrate his point, he takes the example of gold: “In the 1980s in the United States, inflation was between 10% and 17% depending on the year. At that time, the price of the gold has not progressed. So a priori, there is no obvious correlation, even historically, between the price of gold and inflation.”
Gold therefore seems to be an ideal investment in a period like the one we are going through, but what are the scenarios to consider regarding the future of its price?
Today the price of gold is between 1700 and 1800 euros: this is a historically very high figure which allows sellers to obtain quite acceptable margins. According to Serge Belinski, two scenarios are now possible: “Either gold production increases steadily in the face of constant demand, in which case the investment remains completely reliable. On the other hand, if the miners increase their production faster than demand, or if demand declines in the event of an economic downturn, the price of gold is likely to fall.”
Gold is the first of the precious metals that many investors think of. However, money is also mentioned a lot. Which could be the most advantageous during this period?
“Whether it’s gold or silver, the margins are particularly interesting at the moment. The context is favorable for all commodities today”, explains the founder of L’Investisseur Français. However, if the margins are important indicators, other factors must also be taken into account in this choice.
“In terms of box quality, both are very poor on average. However the best ones, like Barrick Gold, have much higher returns on investment in the gold sector than in the silver sector.”, exposes the expert.
Thus, gold would seem to be a safer investment than silver. However, according to Serge Belinski, another metal, this time non-precious, would be in a particularly favorable context and therefore deserves attention: iron.
