On Wednesday, expectations of interest rate hikes in the United States limited profits and put pressure on gold. US gold futures for delivery in December 2018 fell to $ 1,211.50 per ounce, pressured by the advance of global stocks and after the dollar index fell to daily lows. Several factors limited the rise in gold, including expectations of further increases in interest rates in the United States this year, record bets to price declines and sales of funds traded on the stock market. Analysts and operators are alert to the outstanding psychological level of the $ 1,200. Gold fell below this mark for the first time this August since March 2017, giving it momentum to touch a minimum of $ 1,159.96. Gold prices are on track to fall for the fifth month in a row, becoming the longest streak since early 2013.


My understanding is very basic. I thought that with rampant inflation and with our central bank selling huge reserves of dollars every day and with the economy basically imploding, that the price of the gold would be higher. But it's still dropping.

I read that if the interest rates in the US rise, then gold drops and vice versa. I dont know about global stocks, the dollar index or funds. I'm just the average Joe trying to protect his wealth.

Would gold be a good investment in case of hyperinflation and a possible (certain) default of my country?

  • What country are you in? You reference the US, which has a very strong economy and low inflation. Despite a lot of deficit spending over the past decades, no serious economist considers the US government to be at serious risk of default anytime soon (which is why US Treasuries are widely considered the world's safest investment). What you're describing sounds more like Venezuela. – Vulcan Aug 31 '18 at 6:07
  • Argentina. Sadly, Argentina... once again in turmoil. – Jh62 Aug 31 '18 at 6:32
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    I'm trying to understand what answer you're seeking. The title asks for an explanation to be (more simply?) explained, but in the question itself, it seems that you're looking for advice about whether gold is a good hedge against certain adverse economic conditions. Can you please edit to clarify the question? There's an edit trail for those that want to look at the editing history, so feel free to completely rewrite your question and its title. – Lawrence Aug 31 '18 at 6:47
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    @Lawrence Now that I read your comment, it can be confussing reading it like that. I updated the title. – Jh62 Sep 1 '18 at 3:02
  • While I understand the need to close questions that ask for investment advice. The answer is incontrovertible as it pertains to the correlations between ARS, USD and gold. Even without the example quoted, when considering only the title of the question. The investment advice is constrained by a condition, it could be reformulated as 'Is gold a good investment in countries suffering from local hyperinflation'? – TZubiri May 31 '19 at 22:43

I'm sorry to hear about your country's troubles.

It looks like you're quoting gold prices in USD, which is not having an inflation problem now. That's probably the cause of the confusion.

If you look at gold prices in the Argentine Peso, you'll see that the price has increased. This makes sense--if the Peso drops, the price of gold in Pesos should rise. https://www.goldbroker.com/charts/gold-price/ars

If you don't have any confidence in the future of the Peso or of Argentine stocks and bonds, gold would be one option. But so would any investment that isn't strongly connected to the Argentine economy: foreign stocks, bonds, and currency would hold their value no matter what happens in Argentina. If capital controls are imposed, it could make it hard to trade in foreign assets though.

Good luck.

  • You nailed it. I changed the metric to Argentine Peso in the same web where i got that quote and yes, the price is going up since Jan 2016. Thanks very much! – Jh62 Sep 1 '18 at 3:12

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