Gold’s Popularity Could Rise In 2022

Gold’s Popularity Could Rise In 2022

An illustration of gold ingots and future investment graph In 2021, gold looks like a nonstarter. It has drifted down ~6% even as inflation has sped up ~6%. Is it unpopular for a reason? Not necessarily. Instead, it's probably the result of investors focusing on other, popular investments. Disclosure: Author holds Newmont Corporation and Barrick Gold Corporation common stock But the times are changing. People are getting worried about inflation continuing to rise faster. In the last 12 months, the University of Michigan Survey of Consumers Inflation Expectation has jumped from about 2-1/2% to almost 5%. So, how are they going to protect themselves when safe interest rates continue to track below 2%? Investing in gold is an age-old, inflation-protection strategy. Additionally, in times of gold popularity, gold mining company stocks can be even better performers. Two examples are: The decade-long gold price stagnation from gold's 2011-12 peak prices caused gold mining companies like Newmont Corporation NEM (U. S.) and Barrick Gold Corp GOLD . (Canada) to improve strategies, bolster operations and strengthen finances. With the current lack of investor interest in gold and gold mining stocks, those companies' stock valuations remain attractive. The price/earnings ratios for both are less