There are many reasons why gold is a hedge against inflation. One reason is gold is one of the best mediums of storing desired work i.e. wealth. It takes desired work to mined gold, since this is true there is a limit on the amount of gold that can be mine at any given time. With this limitation and the aspects of less profits for mining companies if the price of gold goes down or more profits and more incentive to mined more if the price of gold goes up, keeps the purchasing power of gold relatively stable.

Fiat government currencies on the other hand all have a trend of losing purchasing power over time. With inflation the number or quality of goods and services you can acquire over time with the same amount of currency is drastically diminished. This is one of the main reasons why some investors are interested in gold. If looking to invest in gold as a hedge against inflation it is recommended to invest in gold bullion. With gold bullion you will get the most physical gold for your money. Gold bullion is gold coins and bars that are usually a little above spot price.

When investing in gold as a hedge against inflation it is recommended that you stay away from numismatic or proof coins. The reason for this is these coins are seen as collector’s items and will usually be significantly above spot price. These coins also will require additional attentive research to know if you are getting a fair price. With gold bullion once you know the spot price and know what similar coins are selling for it can give you some idea of a fair price. Investing in gold is one of the best ways to protect your wealth against inflation or any other economic downturns a society might face.