Are your clients prepared for higher inflation?

Rael Demby, CEO of The South African Gold Coin Exchange (SAGCE) & The Scoin Shop simplifies the argument for physical gold during volatile and uncertain conditions, and suggests that prudent South Africans should add gold to their anti-inflation tool-kit.


Inflation is the big number to watch now in South Africa. With a high unemployment rate, sluggish economic growth, and the impact of rising fuel, manufacturing, and logistics costs, the South African consumer should be concerned.

Prudent South Africans are concerned about rising food prices, the cost of petrol and diesel and the spike in electricity rates. Those who have been paying attention to the CPI figures calculated by The South African Reserve Bank, have seen that inflation has accelerated. This is not good news for South Africans. Consumers’ cost of living depends on the prices of many goods and services, and higher inflation means they are worse off because they can afford to purchase less.

We are in an inflationary environment, not just locally – but worldwide. The widespread opinion is that Covid-19 gets a lot of the blame for this. The key theme is Covid disruption and, in particular, the crippling of the supply chain. That’s one reason why we’re seeing inflationary pressures around the world. The pandemic-era recovery is causing soaring prices, and governments and central banks are scrambling to pivot to inflation-fighting. This course will be here for a while, so it’s not good news for South Africans.

So with an inflation surge a reality, what can you offer your clients? What suggestions can you put forward to counter inflation and protect assets? Is gold in your toolkit? Physical bullion and gold coins?

Gold has a six thousand year track record as a safe store of value and is the only money that carries no counterparty risk. Gold offers savers a safe haven that protects wealth, especially during volatility and economic uncertainty. Buyers of physical precious metals are motivated by the fact that gold and silver offer a safe store of value, are a currency hedge, combat inflationary concerns and are moveable. For most of our existing clients, wealth preservation is a focus.

With inflation on an upward surge, we are seeing a huge interest in gold bullion, silver and numismatics. Nothing beats the tangible security of holding genuine gold coins in your hand. Our clients find that very comforting and appreciate that gold provides prosperity safeguarding.

SAGCE & The Scoin Shop has been in operation for over 50-years and we have unparallelled depth of experience in buying and selling gold coins. Our team of experienced brokers are seeing an increase in enquires. Our established clients are thinking about buying more gold, new clients are approaching us to find out about gold and the legal and advisory professionals are contacting me to discuss estate late matters and secure storage.

“If you look for perfection, you’ll never be content,” wrote Leo Tolstoy in Anna Karenina. Gold is not a perfect hedge. Higher inflation expectations are giving the gold price a boost, and the tried-and-tested insurance characteristics of gold coins like the Krugerrand make for a sensible portfolio diversifier. Gold’s resilience is well documented.

Rael Demby, CEO of The South African Gold Coin Exchange (SAGCE) & The Scoin Shop.

Throughout history, few investments have rivalled gold in popularity as a shield against almost any kind of trouble, from inflation to economic upheaval or currency fluctuations, to war. Our philosophy is that gold coins are for holding. Gold coins are about wealth preservation and generational wealth creation. In the long term, gold holds its value against inflation. But in any shorter period, it may or may not be a good hedge. We continue to reshape the industry by listening to our clients, anticipating their needs,redefining opportunities and ensuring that gold is for everyone.

Speak to me to find out more about SAGCE & The Scoin Shop, our products and services and how together we can make sense of this high-inflationary environment and work together to preserve wealth. or