The Gold is Better than the Stock Exchange - "A Warning Signal"

The gold price is at record levels – and since the millennium shift, gold has been a clearly better investment than the stock exchange. It is a real warning signal, warns commodity expert Torbjörn Iwarson, who says it indicates that something is fundamentally wrong.

» Updated: October 04 2024

» Published: September 01 2024

The Gold is Better than the Stock Exchange - "A Warning Signal"
Photo: Anders Humlebo

The 2000s have been a golden period for gold investors. The dollar value of the precious metal has increased by approximately 800 percent since January 2000, while both the S&P 500 index in the USA and the Stockholm Stock Exchange have increased by around 300 percent, a bit more if you include dividend payments. However, those who have invested in Sweden have missed out on the benefits of a stronger dollar, so in kronor, gold has increased even more.

Over the past three years, the gold price has risen by more than 40 percent, while the S&P 500 index has risen by around 26 percent.

One reason for the increase in gold is that debts in many countries have risen sharply, according to Christian Kopfer, a commodity analyst at Handelsbanken.

The debts of the really large economies have escalated. For example, the USA has never had such a high debt in relation to the size of the economy.

A high level of debt increases uncertainty about the economy and makes gold a "safer" investment.

"Warning signal"

Another reason is that countries have printed more money to boost economic growth, according to Kopfer.

If you look at the money supply in Europe and the USA, it has gone straight up.

This also benefits the gold price.

The currencies are becoming less valuable, and then gold becomes a protection against it, simply.

The increase has been reinforced by central banks buying a lot of gold in recent years.

And that the gold price has risen more than the stock market - suggests that something is wrong, according to Torbjörn Iwarson of the commodity fund Centaur Commodity Fund.

This is a real warning signal. A dead metal like gold has thus yielded better than ingenuity, intelligence, and hard work.

Continues to rise

According to Torbjörn Iwarson, this indicates low productivity and growth. And both he and Christian Kopfer believe that gold will continue to rise in price.

There is no limit to the budget deficit or national debt in the USA. It just keeps increasing, says Iwarson.

Christian Kopfer is on the same track. He believes that the gold price can rise from today's 2,500 dollars to 3,000 in a couple of years.

It's not entirely impossible. It has increased a couple of thousand dollars in value over 20 years.

He believes that gold can be a good investment, but adds that one should see it as a complement.

One must not forget that gold is a risky asset. For example, if there is a major shock to the economy, all asset classes usually take a big hit.

Karin Rader/TT

Facts: How to invest in gold

TTTT

Investment gold. Physical gold can be purchased in the form of coins and bars of various sizes on sites such as Guldcentralen, Tavex, and Guldcentrum. It requires secure storage and insurance.

Companies in the gold industry. Small investors can indirectly invest in gold by buying shares in, for example, mining companies or funds focused on gold companies. This provides some exposure to the gold price, but one must reckon with usual company risks and market fluctuations.

Stock market products that follow the gold price. Those who want a more direct exposure to gold can look at stock market products - such as certificates, ETFs, and ETCs with gold - that follow the gold price and also have actual gold bars as collateral.

Source: Avanza and Nordnet

Tags

TTT
By TTThis article has been altered and translated by Sweden Herald

More news

Hooters Files for Bankruptcy, Plans
1 MIN READ

Hooters Files for Bankruptcy, Plans to Sell Company-Owned Locations

Eurozone Unemployment Drops to 6.1
1 MIN READ

Eurozone Unemployment Drops to 6.1 Percent in February

Eurozone Inflation Eases to 2.2
1 MIN READ

Eurozone Inflation Eases to 2.2 Percent in March

Swedish Central Bank Boosts Dollar
1 MIN READ

Swedish Central Bank Boosts Dollar Holdings in Reserve Shift

Central Bank Deputy Predicts Inflation
1 MIN READ

Central Bank Deputy Predicts Inflation Easing in Sweden

Tesla Faces Significant Decline in
1 MIN READ

Tesla Faces Significant Decline in Swedish Car Registrations

Sweden's New Industrial Deal Sets
3 MIN READ

Sweden's New Industrial Deal Sets Wage Growth for 2025-2027

Snus Delivery Strike Averted as
1 MIN READ

Snus Delivery Strike Averted as Union Reaches Agreement

Swedish Manufacturing Gains Momentum as
2 MIN READ

Swedish Manufacturing Gains Momentum as Eurozone Shows Positive Trends

Positive Outlook for Harvest Season
1 MIN READ

Positive Outlook for Harvest Season Despite Challenges Ahead

Sweden's New Industrial Agreement Brings
2 MIN READ

Sweden's New Industrial Agreement Brings Stability in Uncertain Times

Stockholm Stock Exchange Rebounds as
2 MIN READ

Stockholm Stock Exchange Rebounds as Key Stocks Climb

Gold Prices Hit Record High
1 MIN READ

Gold Prices Hit Record High as Tariff Decision Looms

Australian Central Bank Holds Rates
1 MIN READ

Australian Central Bank Holds Rates Steady, Signals Caution on Inflation

Bankruptcies Rise Again with Hotels
1 MIN READ

Bankruptcies Rise Again with Hotels and Restaurants Hit Hardest

Asian Markets Rebound as Investors
1 MIN READ

Asian Markets Rebound as Investors Await Tariff News

Trump's Global Car Tariffs Begin
3 MIN READ

Trump's Global Car Tariffs Begin as Broader Trade Measures Loom

Open AI Secures Record 400
1 MIN READ

Open AI Secures Record 400 Billion Kronor Investment Boost

Swedish Industry Reaches 6.4 Percent
2 MIN READ

Swedish Industry Reaches 6.4 Percent Wage Agreement Over Two Years

Genre image
1 MIN READ

Swedish Industry Sets 6.4 Percent Wage Increase in New Agreement

US Stock Markets Mostly Rise
1 MIN READ

US Stock Markets Mostly Rise Despite Tariff Concerns

EU Stands Firm Against Trump's
2 MIN READ

EU Stands Firm Against Trump's Tariff Threats, Says Swedish Minister

Latvia Secures 2.1 Billion Kronor
1 MIN READ

Latvia Secures 2.1 Billion Kronor Deal with Saab for Air Defense Systems

Renault Acquires Full Ownership of
1 MIN READ

Renault Acquires Full Ownership of Renault Nissan Automotive India

1,700 Jobs Saved as Northvolt
2 MIN READ

1,700 Jobs Saved as Northvolt Navigates Bankruptcy in Sweden

Swedish Pension Saver Loses Appeal
1 MIN READ

Swedish Pension Saver Loses Appeal in Falcon Funds Fraud Case

Huawei Reports First Quarterly Loss
1 MIN READ

Huawei Reports First Quarterly Loss in Years Following Sanctions

France Fines Apple 150 Million
1 MIN READ

France Fines Apple 150 Million Euros for Competition Violations

Maurel & Prom Shares Drop
1 MIN READ

Maurel & Prom Shares Drop 15 Percent After Venezuela License Revoked

Norwegian Oil Fund Invests 1.4
1 MIN READ

Norwegian Oil Fund Invests 1.4 Billion Euro in Offshore Wind Projects

Sweden's Wage Talks Reach Critical
1 MIN READ

Sweden's Wage Talks Reach Critical Stage as Deadline Looms

Sweden Leads Nordic Region in
1 MIN READ

Sweden Leads Nordic Region in Money Laundering, Report Finds

Swiss Varo Energy to Acquire
1 MIN READ

Swiss Varo Energy to Acquire Swedish Fuel Company Preem

German Inflation Drop Signals Potential
2 MIN READ

German Inflation Drop Signals Potential ECB Rate Cut in April

Half of Retrained Workers Shift
1 MIN READ

Half of Retrained Workers Shift to New Industries, CSN Reports

EQT-Backed Omega II Bids 54.9
1 MIN READ

EQT-Backed Omega II Bids 54.9 Billion Kronor for Fortnox

Food Prices Continue to Climb,
3 MIN READ

Food Prices Continue to Climb, but Major Increases May Be Over

Stockholm Stock Exchange Drops as
2 MIN READ

Stockholm Stock Exchange Drops as Trump's Tariff Plans Rattle Markets

Tokyo Stocks Drop Sharply as
1 MIN READ

Tokyo Stocks Drop Sharply as Trump Tariffs Loom

Trump and Starmer Discuss Progress
1 MIN READ

Trump and Starmer Discuss Progress on US-UK Trade Deal