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Ask The Expert

Why Gold Remains the Ultimate Hedge | Ask Andrew Sleigh

Andrew Sleigh

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In a world where uncertainty looms, one question echoes through investors' minds: how do we protect our wealth? Gold and Bitcoin dominate the conversation, offering unique solutions to modern financial challenges.

Today, we address audience queries on a wide range of topics, from geopolitical unrest in the Middle East to the 100K crypto rally. We'll also delve into the impact of Biden's presidency on precious metals and the year-end expectations with our esteemed guest, Andrew Sleigh. For those who may not be familiar, Andrew is a seasoned financial expert in the precious metals industry, boasting over 34 years of experience. Since 2017, he has been dedicated to assisting individuals in safeguarding their assets with gold and silver. Let's get started.

 

Geopolitical Unrest and Its Impact on Precious Metals

 

  • How Global Crises Drive Demand for Safe-Haven Assets

Indeed, the more upheaval and instability we witness globally, the more people will turn to the reliable refuge of gold and silver. While these events may cause temporary turbulence, they ultimately drive people towards these enduring assets. With more such events on the horizon, the flight to these time-tested safe havens, gold and silver, is inevitable. These geopolitical shifts will undoubtedly influence prices. As turmoil escalates, the prices of gold and silver will inevitably rise. In the long run, this is a positive development for gold. There's no doubt about it.

 

  • Historically, geopolitical turmoil drives demand for safe-haven assets like gold. Are these specific scenarios in these crises that you think could further elevate gold prices?

Yes, with all the various geopolitical stuff going on, it elevates gold prices. Specifically Syria and South Korea, let's use those as examples. Because there's going to be more and more unsettling events. Like I mentioned earlier, this turmoil will make it increasingly apparent to people that the system is coming for their assets. Governments in these scenarios may put people's assets at risk. Having physical silver and gold under your direct control will become more and more paramount as time goes on, no matter where you are in the world.

 

price of gold in 2025

 

  • Would you say that something as specific as South Korea, which seems more like a sudden rug-pull issue, differs from a long-standing crisis like Syria in how it affects South Korea's economy and its people's view of gold and silver as safe havens?

If South Koreans start having confidence issues in their government, they'll begin buying gold locally and silver locally. In itself, this may not have a huge impact on global gold prices because South Korea is a relatively small country. I'm not sure what numbers or percentages of the population would need to buy gold for it to have a global effect.

However, it adds fuel to the fire. Increased local demand applies more pressure to the accumulation of gold. As more people start buying, more ounces—potentially millions—will be in demand. This additional demand supports upward pressure on gold prices as similar situations unfold in other regions.

 


Contact Andrew today at asleigh@sprottmoney.com to start your journey toward financial security.


 

The Federal Reserve and Inflation Hedge

 

  • Bringing it back to the West, the Federal Reserve continues to come under scrutiny for its policies. How do actions by bad actors diluting the money supply affect gold's role as a hedge against inflation?

Gold is the barometer for bad actors who engage in excessive money printing. Gold prices rise in dollar terms—whether it's Canadian dollars, US dollars, or other currencies. When a country's gold price soars, it's a direct indication that the currency is devaluing against gold. Gold shows the erosion of purchasing power caused by money printing and inflation. That's how it acts as a hedge against inflation.

 

Gold vs. Bitcoin: Competitors or Complementary?

 

  • With increasing skepticism around fiat currencies and central bank policies, how can gold reinforce its role as a reliable store of value in an era of monetary uncertainty, especially with something like Bitcoin?

Bitcoin hasn't been tested and relies entirely on electricity and the internet. Gold isn't dependent on any of that. You can hold it directly, and that's the best way. You can barter directly with gold or silver in hand. If you try bartering with someone using a paper note that claims to represent gold, they might not trust you. It's like offering an empty can of food and promising to fill it later—it's not reliable. When times get really bad, cryptos and Bitcoin are controlled by third parties, making them unreliable. On the other hand, physical gold and silver are tangible assets that can't be controlled as easily. That's why I'd choose gold and silver all day over Bitcoin.

 

  • With Bitcoin rallying toward $100K, what does this mean for gold's position as a store of value? Should investors see these assets as competitors or complementary?

I see them as competitors and also as distractions. Bitcoin has value only because people assign it value, much like fiat currencies. There's talk that the US might use Bitcoin to monetize its debt. If that happens, Bitcoin becomes "US Dollar 2.0." Some even predict Bitcoin reaching a million dollars, but those numbers would reflect fiat currencies losing value rather than Bitcoin gaining real value.

 

  • Will Bitcoin's value come from government backing, which contradicts the original purpose of cryptocurrency?

Exactly. Countries that understand the instability of fiat currencies—like China—aren't buying Bitcoin. They're buying record levels of gold and silver.

 

bitcoin

 

  • Does it show governments recognize the stability of precious metals over crypto?

Absolutely. At the end of the day, governments hate gold because it exposes their financial manipulation. Gold is the ultimate barometer of economic mismanagement. When deficits and debts pile up, gold tells the world that the country is going bankrupt. Governments can't spend more money than their gold reserves under a gold standard, which is why they abandoned it. Gold restrains their ability to manipulate the economy.

 

  • Crypto's volatility contrasts sharply with gold's stability. Do you think the Bitcoin rally could shift sentiment away from gold, or does it reinforce gold's role as a stabilizing asset?

I think it depends on people's understanding and trust. Those who trust the government might opt for Bitcoin, while others, who see the bigger picture, will go for gold. Younger generations tend to favor Bitcoin because they view gold as a relic. However, Bitcoin is just another fiat system. It's dependent on government support, and its true independence is questionable.

 

The Biden Presidency and Gold's Future

 

  • As President Biden's term ends, what economic or geopolitical shifts could alter gold's trajectory?

The fundamentals—rising debt, inflation, and monetary policies—remain unchanged regardless of political leadership. Lower interest rates, promised by both parties, are positive for gold. We might see short-term euphoria with a new administration, but the debt train won't stop. Gold and silver have no choice but to rise over time due to these structural economic pressures.

 

  • And to wrap up, how did gold and silver perform in November of 2024? Were there any standout trends?

After the "Trump effect," gold and silver saw a pullback, which surprised many, including myself. However, markets can't move up continuously without taking a breather. This consolidation phase turned out to be bullish. Gold has resumed its upward trend, while silver continues consolidating, preparing for a breakout. We're now operating from a much higher floor than a few months ago, setting the stage for future gains.

 


Let Andrew’s expertise guide you in building a robust portfolio.

Contact him at asleigh@sprottmoney.com today!


 

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About Sprott Money

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Since 2008, our customers have trusted us to provide guidance, education, and superior customer service as we help build their holdings in precious metals—no matter the size of the portfolio. Chairman, Eric Sprott, and President, Larisa Sprott, are proud to head up one of the most well-known and reputable precious metal firms in North America. Learn more about Sprott Money.

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