Inflation remains high, deposit value shrinks, gold and silver become safe haven for wealth

On July 29, 2026, the US Department of Commerce released latest data showing that the annual rate of the core Personal Consumption Expenditures (PCE) price index remained at a high of 3.2% in June, far above the Fed's 2% target. Market expectations for a Fed rate cut in the second half of the year quickly heated up, the US dollar index came under pressure, spot gold prices once broke through the $4,100 mark, and silver also climbed higher, approaching $48. Against the backdrop of inflation persistently eroding purchasing power, more and more investors are re-examining the fundamental question of "why to hold gold and silver."

Inflation monster devours deposits, real purchasing power continues to erode

According to data from the US Bureau of Labor Statistics, the cumulative inflation rate over the past three years has exceeded 15%, while bank fixed deposit rates have barely kept up with around 2%. This means that if you deposit $100,000 in a bank, its real purchasing power after three years is only about $85,000. In other words, deposits are quietly shrinking at a rate of about 5% per year. In contrast, gold has accumulated gains of over 55% since 2023, and silver has surged more than 80%, far outperforming cash and bonds.

History proves: gold and silver are the best partners against long-term inflation

Looking back at the oil crisis of the 1970s, the US CPI annual growth rate once exceeded 12%, and gold prices skyrocketed from $35 to $850, a gain of over 23 times. After the 2008 financial crisis, the Fed printed money aggressively, and gold rose from $800 to $1,900. When the COVID-19 pandemic broke out in 2020, governments around the world went on massive spending sprees, and gold prices again hit an all-time high of $2,075. Every major round of monetary easing and inflation surge has verified the value-preserving ability of gold and silver.

Rate cut expectations heat up, making gold and silver more attractive

Currently, the market predicts the Fed will start cutting rates in September, with a total cut of 2 to 3 basis points for the year. Historical experience shows that rate cut cycles often drive up gold and silver prices. This is because lower interest rates reduce the opportunity cost of holding gold and lead to a weaker US dollar, further boosting dollar-denominated gold and silver prices. Goldman Sachs has raised its 2027 gold target price to $5,000 and silver to $70 in its latest report, citing "continued surge in global physical demand for gold and silver, with limited supply growth."

Four core advantages of holding gold and silver

  • Hedge against inflation: Fiat currency depreciates each year due to money printing, while gold and silver supply is relatively fixed, protecting purchasing power.
  • Safe-haven asset: During geopolitical risks, financial crises, and war turmoil, gold and silver are often seen as safe havens.
  • Diversified investment portfolio: Gold and silver have low correlation with stocks and bonds, effectively reducing overall volatility.
  • Good liquidity: A global 24-hour trading market, easy to liquidate, with no default risk.

How to start holding gold and silver?

For ordinary investors, it is recommended to start with physical gold and silver bars or gold ETFs. Physical gold and silver have no counterparty risk and are suitable for long-term holding; ETFs are convenient for trading and suitable for short- to medium-term operations. The allocation ratio can be adjusted based on personal risk tolerance, generally recommended at 10% to 20% of total assets. Currently, Bank of Taiwan offers gold passbook and silver passbook services, allowing participation with as little as a few thousand dollars. There are also good gold and silver trading platforms in the international market, but be sure to choose regulated and reputable brokers.

Conclusion

At a time when inflation remains unresolved and rate cuts are imminent, the purchasing power of cash is rapidly eroding. Converting part of your wealth into gold and silver is not short-term speculation but a long-term wealth preservation strategy. As Buffett said, "Gold is the only asset that will never betray you." Start today to build a solid safe haven for your wealth.