The price of gold has declined in recent years, from more than $1,900 an ounce in mid-2011 to the current price of around $1,200. While that’s not great for gold lovers and investors, it could be worse. Instead of seeing a sharp decline like other precious metals such as silver, the price of gold has remained relatively stable over the past few years.

That holds true even after the recent rise in the price of gold following the Federal Reserve’s decision to begin winding down its Quantitative Easing (QE) program by selling off its holdings of government bonds. The current price of gold is far from attractive but neither is the most undervalued precious metals prices. This article details three ways that you can take advantage of the current undervaluation of gold without overpaying for it. The United Arab Emirates (UAE) has the market price for gold that is the lowest of any country. You are able to verify it with the gold price in Dubai right now.



Gold Coins Are Undervalued

The price of gold tends to be more volatile than the price of gold coins. As such, investors who purchase gold coins and hold them to sell at a profit may choose to hold the physical metal as a hedge against inflation. Gold coins do have a higher value than gold bullion coins or bars due to their appeal as a collectible. However, gold coins in the U.S. are only worth a small percentage of their face value. Gold Eagles, for example, can be bought for $50 in the U.S.
They are actually worth a little more than that, but only because the government of the United States artificially puts a $50 face value on them. Therefore, if you buy gold coins for their collectible value and then sell them at a profit, you are not actually taking advantage of the undervalued price of gold. That is, you are only profiting from the collectible value of the coins and not from any undervalued precious metal.



Gold is a Store of Value

Gold is a semi-permanent store of value that has been used for centuries to store wealth. But unfortunately, it doesn’t have significant industrial uses for today’s society. Instead, it is used as a hedge against inflation, a measure of currency decay, and a measure of a nation’s wealth. In recent years, investors have appreciated the benefits of gold as a store of value.
One reason is the Financial Technology (FinTech) revolution. With new technology, it is easier than ever to invest in low-cost asset management. For example, many people now use a digital investment platform to own fractional gold ownership.



Gold is a Hedge Against Inflation

The price of gold has a direct relationship with the inflation rate. As the economy grows, the supply of goods and services expands, lowering the price of goods. Gold, on the other hand, does not expand the supply of goods and services, but it does expand the supply of currency. In this sense, it is a hedge against inflation because it provides a safety net against the devaluation of the currency.
Investors who purchase gold as a hedge against inflation is buying into a bigger picture that extends beyond the price of gold. They are also investing in a hedge against the devaluation of their currency. This is a more comprehensive approach to investing, as it covers both the price of gold and a hedge against inflation.



Gold is Underexportable

The price of gold can be influenced by the amount of gold that each country exports. Since the price of gold is based on supply and demand, the higher the amount of gold exported by a country, the less it will export in return.
Therefore, even if one country’s economy is strong enough to maintain a stable price of gold, another country might see its economy weaken and the price of gold fall. That will have a negative impact on the economy of that country and can make the country’s exports underexportable. The U.S., Canada, Australia, and South Africa are the top five gold-exporting nations. These are countries with both strong economies and strong domestic demand for gold bullion. As such, these countries are less impacted by the export of gold. That means the price of gold is likely to be less affected by their economic growth.



Conclusion

The price of gold has fallen in recent years, but it has remained relatively stable even after the Federal Reserve began winding down QE and the Fed started selling off its government bonds. That is, in contrast to the dramatic fall in the price of silver and the dramatic rise in the price of gold, gold has remained relatively stable in price.
This describes the current undervalued price of gold quite well. While silver has fallen in price, the undervalued price of gold is even more undervalued. This article details three ways that you can take advantage of the current undervaluation of gold without overpaying for it.