Millionaire with one kilogram of gold? In these countries, it's possible.

Goldprice and inflation

Two years ago, the gold price was around €50,000 per kilogram. Today, one kilogram of gold costs nearly €60,000. Looking at the period between June 2021 and April this year, the gold price has increased by approximately 16%. Comparing this to Dutch inflation during the same period (15%), we see that gold has outperformed savings. However, this does not mean that gold always performs better than a savings account. For example, between 2015 and 2018, the gold price remained around €35,000.

The gold price does not directly react to rising inflation. Instead, the expectation that more people will buy gold during periods of high inflation creates the link between inflation and an increase in the gold price. Gold tends to thrive during times of high inflation, currency devaluation, and political uncertainty.

Purchasing power

Additionally, gold always retains its intrinsic value. Because of this, it is seen as an excellent store of value, providing a safeguard for preserving purchasing power. Gold itself does not increase in value; rather, it reflects the decline in the value of the currency in which the gold price is denominated.

Other financial products, such as currencies, stocks, (government) bonds, and savings accounts, all carry the risk of their value dropping to zero or even going negative, as we see today. However, if you own physical gold, you are not dependent on complex financial systems or the performance of companies, countries, and banks. Additionally, gold cannot be printed or artificially created, unlike fiat money.

The price of gold in local currency

Inflation in the Netherlands is currently high. However, it is relatively mild compared to countries experiencing hyperinflation. In the countries listed below, currency devaluation is so extreme that one kilogram of gold can make you a millionaire in the local currency.

Gold price in local currency as of 26-05-2023

Disclaimer: The Silver Mountain does not provide investment advice, and this article should not be considered as such. Past performance is no guarantee of future results.