Gold has always been a solid investment, especially over the long term. It often weathers market downtimes with little to no negative impact, retains a relatively stable value in different financial markets, requires little maintenance, and is an effective way to save money for the future. However, despite increasing rates of inflation and stock market roll over, the past couple of months haven’t been great for gold stocks.
However, this doesn’t mean gold has been in a major slump. Gold stocks may have been on a steady rise but have yet to reach the heights one might expect during major inflation and after stock market rollovers.
This is primarily because investors have limited their investments in gold over the past year or two, leading to significantly reduced inflows of investment capital. A 2021 report from MartketWatch reveals that in the first half of 2021, global investments in gold went down by 60%.
Investors are now coming back to invest their funds in gold exchange-traded products in anticipation of a stock market correction. Should this continue in the coming weeks and months, gold stocks will see a sharp rise in value that will attract even more investors to gold-exchange traded funds.
Gold may have seen a downturn in 2021 that had some experts wondering whether it was losing its status as a hedge against inflation, but it seems gold stocks are now on the rise. From late September last year to last month, gold stocks went up by 7.1%, outperforming popular digital currency Bitcoin and the S&P 500 in that timespan, which fell by 10.5% and 0.1% respectively.
These gains were made despite a hawkish Federal Reserve meeting highlighting that the dollar index increasing by 1.7%.
In the last quarter of 2021, global gold investments saw a massive 117.5% year-over-year increase, which was a major improvement over the 4.1% gain it made in the previous quarter. Additionally, the demand for traditional physical-bar-and-coin saw a year-over-year increase of 18% or 48.5 metric tons.
This increase was driven primarily by a much larger jump in demand for gold-exchange traded funds. Surprisingly, this jump was due to a reduction in the sale of gold stocks rather than investors buying up as much gold stock as they could.
Worldwide gold-exchange traded fund draws reached 131.2t over the last quarter of 2020 but dropped to just 17.6t in the last quarter of 2021. This year may just signal a rise for these traditionally solid investments as investors flock back to buy gold stocks of the different mining companies out there, such as StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF).
NOTE TO INVESTORS: The latest news and updates relating to StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF) are available in the company’s newsroom at https://ibn.fm/STUPF
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