Gold Gaining Greater Attention in Wake of Menendez Scandal

Political scandals rarely give rise to either winners or losers. But in the wake of yet another probe into scandal-prone Senator Bob Menendez (D-NJ), there was a big winner, and it was… gold?

Yes, gold was front and center in the latest bribery allegations against Menendez, as reports surfaced that gold bars were among the alleged items Menendez received as bribes, along with hundreds of thousands of dollars of cash.

Gold Takes Center Stage

Gold even made it onto the House floor as Congressman Matt Gaetz (R-FL) jokingly bemoaned the fact that the US dollar has become so devalued that Senators now have to be bribed with gold bars. But while Gaetz may have been making light of Menendez’ situation, his statement had more than a bit of truth to it.

Menendez has never been known on Capitol Hill as a particular friend of gold or of sound money. He has never cosponsored the Federal Reserve Transparency Act (Audit the Fed) for instance. Nor is there any indication that he expressed an opinion one way or the other about the gold standard, competing currencies, or sound money.

If you had to take a guess, you would probably imagine that Menendez’ views on gold or on the gold standard were probably like those of most members of Congress, namely, not very well thought out and probably hewing close to the status quo.

If you had asked Menendez about the gold standard, you likely would have received a boilerplate response like most members of Congress would give you. He might have said that the gold standard was outdated, too restrictive, and that the Federal Reserve has done a perfectly fine job of monetary policy over the past several years.

Yet even someone not known to be friendly to gold understood the value of gold and understood that gold bars had value. He may have allegedly googled how much a kilo of gold was worth, which is understandable given that a kilogram of gold (~32.15 troy ounces) isn’t the easiest to calculate the value of.

But given the fact that Menendez owned and sold gold bars, it’s clear that he understood that gold had value. It just goes to show that you don’t have to be a gold bug to understand that gold is valuable, nor to benefit from owning gold.

New Interest in Gold

In the aftermath of the unveiling of the charges against Menendez, google searches for gold spiked. Well-known retailers began selling out of small gold bars, as the general public suddenly once again became aware of gold and its value.

This renewed interest in gold wasn’t due to people suddenly wanting to try to bribe their Senators (we hope), but because after a long, slow summer many people finally were reawakened to the realization that they need to protect their financial assets, and gold can do it.

It doesn’t hurt that the gold price is now at more reasonable levels than it has been in a while. A combination of the almost-shutdown federal government plus the usual end of quarter maneuvering have pushed the gold price down, giving gold buyers a temporary reprieve.

Could this be the last time the gold price is this reasonable? If seasonality is the main reason behind the temporary dip in gold prices, then don’t be surprised to see prices pick up again in coming weeks.

With markets floundering as the reality of higher interest rates sets in, and with bond yields on 10-year Treasuries up over 50 basis points since the beginning of September, despite the fact that the Fed paused interest rate hikes, October could be a very interesting and turbulent time for markets. And market turbulence could mean good news for the gold price.

Gold’s Protective Abilities

There are many reasons for gold’s continued popularity, reasons that even gold haters should understand. Gold’s ability to act as a hedge against inflation over the long run, and its ability to act as a safe haven asset during times of financial uncertainty and economic instability have made gold a popular asset for those looking to protect their wealth.

Gold is also cash-like in its ability to be owned anonymously or semi-anonymously. And while that may have been something negative in the case of the allegations against Senator Menendez, for those looking to hold valuable assets away from prying eyes, gold can fill that role.

There’s no denying that gold IRAs are important, particularly for those looking to protect assets in tax-advantaged retirement accounts. But even though the government isn’t actively looking at everyone’s IRA accounts, those assets in a gold IRA are still something that isn’t on most people’s radar screens.

Gold can help diversify a portfolio, altering its risk profile. During times of economic turbulence, when other assets tend to fall in value, the gold price can actually increase.

The gold price gained 25% from October 2007 to March 2009, the same period in which markets lost more than 50% of their value. And gold went on to set new all-time highs in the following years, while markets struggled to regain a foothold.

Gold’s protection against inflation during the 1970s was spectacular too, with gold seeing a 30% annualized rate of growth over the course of the decade, a nearly 15-fold increase. If the 2020s become another decade of stagflation, gold owners hope that gold would repeat that kind of performance.

Gold can also be purchased in numerous different ways. While gold bars have taken center stage in the wake of the Menendez allegations, gold coins have traditionally been one of the more popular gold buying options.

You can buy gold coins with a direct cash purchase, allowing you to determine how you store and protect your gold, or you can buy gold coins with a gold IRA, in which your gold coins are stored at a bullion depository and administered by an IRA custodian. The advantage to a gold IRA is that you can roll over assets from existing tax-advantaged accounts into a gold IRA tax-free, then use those assets to buy gold.

Whichever way you choose to buy gold, Goldco has options available to you. With over $2 billion in precious metals placements and over 5,000 5-star reviews, Goldco works hard to provide quality gold coins and bars and superior customer service.

If you’re interested in learning more about how gold can help you safeguard your financial well-being, call the experts at Goldco today.