Gold investment soars in Madrid amid fear of crisis and phantom of inflation

Since the coronavirus pandemic, the the value of gold has skyrocketed. The price hit all-time highs exceed $2,000 per ounce in August 2020, surpassing its previous record of 2011. Throughout history, this precious metal has acted as safe haven in times of crisis or war, since it tends to increase in times of uncertainty, while it decreases when the economy is doing well. This has led more and more people from Madrid to decide to invest in gold, with the aim of obtaining a higher return on their savings and protecting themselves for the future, financially speaking, aware of the reliability that he offers.

This is the case of Pedro and Belén, a married couple who live in the neighborhood of Argüelles, who after experiencing difficult times decided to invest in gold to pay part of the bills that accumulate in their Letter box. “At first we were afraidbut we consulted several people in our same situation and all did well. Gold right now is a safe bet“, they underline 20 minutes.

Every day more and more people ask for information on how to invest their money in gold, be it bullion or lynx (the first Spanish investment gold coin). This is how Isabel, manager of the pawnbroker Oro Atocha, says: “The buying and selling of gold has increased Up to 30% since the start of the pandemic. The stocks fell and gold rosemany people have realized this and have not hesitated to invest,” he explains.

For his part, Carlos González, director of Oro Chamberí, affirms that in his company the purchase and sale of gold has increased by 20 to 25%. “The increase is quite significant and I do not exclude that we reach higher figures depending on electricity, gas or petrol. This metal has always been a housing value and now people don’t think about it“, he manifests.

This precious metal has certain advantages for investors, one of the most important being that it not subject to political vagaries. This reflects the social and economic paradigm shift that we are experiencing after the health crisis, the war in Ukraine and the rise in inflation. The common denominator of the operations is the same: the fear and uncertainty in the face of the crisis.

“The price of metal evolves at the rate of inflation, so their ability to maintain their value in adverse circumstances for other assets is what makes them extremely attractive when it comes to protecting capital and ensuring the purchasing power of those who own them. Fluctuations in metal prices are, in the short term, relatively small, but their the price in the medium and long term, so far, has always been on the rise“, explains Lucía, a precious metals analyst.

Although not everything is investment, there is also a need. Overwhelmed by the various circumstances that have stifled the Spanish economy, many have been forced to sell your jewelry which they kept in a drawer. This is the case of Borja, who lost his job two months ago and now sees himself walking into a store to pawn a watch and several rings. “It’s very sad, but I need the money. The gold is through the roof and you make a lot of money and get out of trouble quickly“, he rocks.

According to professionals in this sector consulted in this way, Borja’s situation has been one of the most demanded since the start of the coronavirus. Many people received many legacies that they acquired for the death of relatives during the Covid and “now what they want is to use it as support to move forward,” says José of Jewelry Collection.

ways to invest in gold

There are several ways to invest in gold, the first being the physical gold (jewelry, bullion, coins…) but this is generally not practical due to custody and security costs. Another are the futures contractswith the advantage (which can be a disadvantage) of leverage.

One of the most popular ways lately is to buy gold with AND F, instruments similar to investment funds, in which the price of gold is traded in cash. The main advantage they have is that you don’t have to worry about finding and paying for a place to store it, or it can be stolen.