Economy
Is Gold An Inflation Hedge?
Many investors consider gold as a safe-haven asset, particularly during times of economic uncertainty. It has been valued for centuries due to its beauty and scarcity. However, one question that often arises is whether gold can act as an effective hedge against inflation. In this article, we will examine the relationship between gold and inflation and explore the reasons why many investors turn to the precious metal in times of rising prices.
Before delving into the topic, it is essential to understand what exactly inflation is. Inflation refers to the persistent increase in the general price level of goods and services in an economy over a certain period. When this occurs, each unit of currency loses purchasing power over time.
Why Investors Turn To Gold During Inflationary Times?
When significant inflation looms on the horizon, individuals tend to worry about their investments losing value.
This fear prompts investors to seek out assets that have historically acted as hedges against rising prices. While younger investors choose to invest in gold stocks, people who prepare for retirement usually choose from the best gold IRA accounts to safeguard their hard-earned funds. Below are the most popular reasons why people choose to invest in gold in the first place.
Historical Track Record
Gold has a long history of being used as a store of value throughout human civilization. Its scarcity and durability make it an appealing investment option during times when traditional currencies lose value due to inflation.
Limited Supply
Unlike fiat currencies controlled by central banks that can be printed at will, new sources of gold are relatively rare and costly to extract from the ground. This limited supply ensures that gold maintains its intrinsic value over time.
Universally Accepted Store Of Value
Gold has been widely accepted as a form of currency across cultures for centuries. Even today, central banks around the world hold significant quantities of gold in their reserves as a safeguard against financial instability or economic crises.
Tangible Asset Class
One crucial aspect that sets gold apart from other investments is its tangibility – you can actually touch it! Unlike stocks or bonds that exist only on paper or in digital form, gold can be held, admired, and worn. This physical presence can provide a sense of security during uncertain times.
What is The Relationship Between Gold And Inflation?
While gold has many qualities that make it an attractive investment during inflationary periods, the relationship between the two is not as straightforward as some might believe.
Historical Analysis
Looking back at past data provides us with evidence of gold’s potential as an inflation hedge. Historical analysis shows that gold prices have often increased during periods of high inflation or economic uncertainty. For example, during the Great Recession of 2008-2009 and more recently during the COVID-19 pandemic, gold prices soared.
Supply And Demand Factors
Demand for gold tends to rise when there are concerns about currency devaluation or rising prices. As investors seek out safe-haven assets, increased demand leads to higher prices. Economic uncertainty and inflationary pressures amplify this effect.
Investor Sentiment
Another factor that influences the relationship between gold and inflation is investor sentiment. When individuals anticipate inflationary conditions, they may rush to buy gold as a hedge against their fears, which subsequently drives up its price further.
Correlation vs Causation
Despite these correlations between gold and inflation, it is essential to acknowledge that one does not necessarily cause the other. Correlations show how two variables move together but do not always demonstrate cause-and-effect relationships. The increase in gold prices during times of rising inflation could also be attributed to other factors such as shifts in investment preferences or changes in international geopolitical dynamics.
Different Ways to Invest in Gold
Now that we understand why investing in gold holds such allure let’s explore some popular methods:
Physical Gold: Holding Tangible Wealth
One classic way of investing in gold is through physical ownership. This includes purchasing bullion bars or coins directly from reputable dealers. By holding tangible assets like these shiny golden coins right at your fingertips, you become an owner of wealth that can be easily accessed or sold when necessary.
However, storing physical gold does require consideration regarding security and insurance measures. For those who prefer a hands-off approach when it comes to storage, reputable companies like Goldco offer secure vaulting services along with flexible options for acquiring precious metals.
Exchange-Traded Funds (ETFs): Golden Access without the Weight
If you’re seeking a more convenient and flexible approach to gold investment, exchange-traded funds might be your golden ticket. These funds allow investors to own shares in a trust that holds physical gold under its custody. This indirect ownership grants you exposure to the price movements of gold without the need for storage or insurance concerns.
Well-established ETFs such as SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) have gained popularity due to their liquidity, transparency, and ease of trading on major stock exchanges.
Gold Mining Stocks: Uncovering Hidden Potential
Investing in gold mining companies can offer additional opportunities beyond owning physical bullion or ETFs. By investing in well-managed mining companies with strong track records, you gain exposure to not only the price of gold but also potential company growth and dividends.
Keep in mind that investing in mining stocks carries additional risks compared to physically holding gold or ETF investments due to factors like operational challenges and geopolitical uncertainties. Thorough research and diversification within this sector are crucial steps when considering this avenue.
Sparkling Preparation: Setting Up a Gold IRA
Now that we’ve explored some prominent ways of investing in gold, it’s worth highlighting an exceptional option for long-term retirement planning – a Gold IRA! A self-directed Individual Retirement Account (IRA) allows you to hold precious metals such as gold within your retirement portfolio.
Companies like Goldco and American Hartford Gold specialize in helping investors set up these unique accounts, enabling them to grow their wealth while enjoying tax advantages associated with IRAs. Consulting with experts from reputable firms will ensure you make informed decisions regarding asset allocation within your retirement account.
Is Gold The Only Inflation Hedge?
While most commonly associated with hedging against inflation, it is crucial to recognize that several other assets can serve as hedges too.
Real estate has traditionally acted as a store of value over time due to its potential appreciation and income generation capabilities. During periods of high inflation, real estate investors can raise rents in response to rising costs, thus protecting their purchasing power.
Investing in commodities such as oil or agricultural products can also serve as an inflation hedge. These assets have direct links to the economy and tend to rise in value during periods of high inflation when demand exceeds supply.
Treasury Inflation-Protected Securities (TIPS). TIPS are government-issued bonds that provide protection against inflation by adjusting for changes in the Consumer Price Index (CPI). As inflation rises, the principal value of TIPS increases, providing investors with a real return above inflation.
Conclusion
By embarking on your gold investment journey, whether through physical ownership, ETFs, or mining stocks, you have the opportunity to participate in the enduring legacy of gold. And for those looking to secure their retirement savings with the radiant glow of gold, a Gold IRA can be the golden ticket to long-term financial success.
While gold has historically demonstrated an ability to retain its value during times of rising prices, it is essential to understand the complex relationship between gold and inflation.
Economic factors, supply and demand dynamics, investor sentiment, and historical precedent all play significant roles in determining gold’s performance during inflationary periods. It is always advisable for investors to maintain a diversified portfolio that includes a mix of assets suitable for various economic conditions.
By Adedapo Adesanya
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has warned against the full privatisation of the country’s government-owned refineries.
Recall that the Nigerian National Petroleum Company (NNPC) is putting in place mechanisms to sell the moribund refineries in Port Harcourt, Warri, and Kaduna.
However, this has met fresh resistance, with the President of PENGASSAN, Mr Festus Osifo, saying selling a 100 per cent stake would mean the government losing total control of the refineries, a situation he warned would be detrimental to Nigeria’s energy security.
Mr Osifo said the union was advocating the sale of about 51 per cent of the government’s stake while retaining 49 per cent, which he described as being more beneficial to Nigerians.
“PENGASSAN, even before the time of Comrade Peter Esele, had been advocating that government should sell its shares. The reason why we don’t want government to sell it 100 per cent to private investors is because of the issue bordering on energy security,” he said on Channels Television, late on Sunday.
“So, what we have advocated is what I have said earlier. If government sells 51 per cent stake in the refinery, what is going to happen? They will lose control, so that is actually selling. But for the benefit of Nigerians, retain 49 per cent of it.“
The PENGASSAN leader maintained that if the government had heeded the union’s advice in the past, the oil industry would be in a better state than it is today.
He addressed concerns in some quarters over whether investors would be willing to buy stakes in government-owned refineries, insisting that there are investors who would be interested.
“Yes, there are investors who surely will be willing to buy a stake in the refinery because our population in Nigeria is quite huge, and those refineries, when well maintained without political pressures and political interference, will work,” he said.
However, Mr Osifo warned that even if the government decides to sell a 51 per cent stake, it must ensure that a complete valuation is carried out to avoid selling the refineries cheaply.
By Aduragbemi Omiyale
Capital market operators have been given a deadline by the Securities and Exchange Commission (SEC) for the renewal of their registration.
A statement from the regulator said CMOs have till Saturday, January 31, 2026, to renew their registration, and to make the process seamless, an electronic receipt and processing of applications would commence in the first quarter of 2026.
“These initiatives reflect our commitment to leveraging technology for faster, more transparent, and efficient regulatory processes.
“The commission is taking deliberate steps to make regulatory processes faster, more transparent, and technology-driven. We are investing in automation, database-supervision, and secure infrastructure to improve how we interact with the market,” the Director General of SEC, Mr Emomotimi Agama, was quoted as saying in the statement during an interview in Abuja over the weekend.
He noted that through the digital transformation portal, the organisation has automated registration and licensing end-to-end as operators can now submit applications, upload documents, and track approvals online, cutting down manual processing time and reducing the need for physical visits.
According to him, the agency has also rolled out the Commercial Paper issuance module, which allows operators to file documents, monitor progress, and receive approvals electronically while feedback from early users shows a clear improvement in turnaround time.
“Work is ongoing to automate quarterly and annual returns submissions, with structured templates and system checks to ensure accuracy. A returns analytics dashboard is also in development to support risk based supervision and exception reporting.
“To back these changes, we have started upgrading our IT infrastructure, servers, storage, networks, and security layers, to boost speed and reliability.
“Selective cloud migration is underway for platforms that need scalability and external access, while core internal systems remain on premisev5p for now as we assess security and cost implications.
“At the same time, we are strengthening data integrity and cybersecurity with vulnerability assessments and planned penetration testing once automation and migration phases are stable.
“These efforts show our commitment to building a modern, resilient regulatory environment that supports efficiency, investor confidence, and market stability,” he stated.
Mr Agama affirmed that the nation’s capital market was clearly on a path toward digital transformation adding that there is an urgent need for regulatory clarity on advanced technologies, targeted support for smaller firms, and capacity-building initiatives.
“A phased and proportionate approach to regulating emerging technologies such as AI is essential, complemented by internal readiness through supervisory technology tools.
“Furthermore, investor education, particularly among younger demographics, will be critical to future-proof participation and drive fintech adoption.
“Innovation is vital, but it must be accompanied by responsibility. As operators embrace automation, artificial intelligence, and data-driven tools, they bear a duty to ensure ethical, secure, and compliant deployment. Safeguarding investor data, preventing market abuse, and maintaining operational resilience are non-negotiable,” he declared.
The SEC DG said that ultimately, responsible technology adoption is about building trust, the cornerstone of our markets saying that trust thrives on fairness, transparency, accountability, and regulatory compliance.
He, therefore, urged operators to uphold these principles adding that it will not only protect investors and systemic stability but also strengthen the long-term credibility and competitiveness of the Nigerian capital market.
By Adedapo Adesanya
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, has said there are no discrepancies in the tax laws passed by the National Assembly and the gazetted versions made available to the public.
Last week, a member of the House of Representatives, Mr Abdussamad Dasuki, raised worries about the differences between its version and that gazetted by the presidency.
However, speaking on Channels Television’s Morning Brief on Monday, Mr Oyedele claimed what has been circulating in the media was fake.
“Before you can say there is a difference between what was gazetted and what was passed, we have what has not been gazetted. We don’t have what was passed,” he said.
“The official harmonised bills certified by the clerk, which the National Assembly sent to the President, we don’t have a copy to compare. Only the lawmakers can say authoritatively what we sent.
“It should be the House of Representatives or Senate version. It should be the harmonised version certified by the clerk. Even me, I cannot say that I have it. I only have what was presented to Mr President to sign.”
Mr Oyedele stated that he reached out to the House of Representatives Committee regarding a particular Section 41 (8), which states, “You have to pay a deposit of 20 per cent.”
He noted that the response given by the committee was that its members had not met on the issue.
“I know that particular provision is not in the final gazette, but it was in the draft gazette. Some people decided that they should write the report of the committee before the committee had met, and it had circulated everywhere.
“What is out there in the media did not come from the committee set up by the House of Representatives. I think we should allow them do the investigation,” Mr Oyedele added.
In June, President Bola Tinubu signed the four tax reform bills into law, marking what the government has described as the most significant overhaul of the country’s tax system in decades.
The tax reform laws, which faced stiff opposition from federal lawmakers from the northern part of the country before their passage, are scheduled to take effect on January 1, 2026.
The laws include the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act, and the Joint Revenue Board (Establishment) Act, all operating under a single authority, the Nigeria Revenue Service.
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