Many people believed gold was the investment product that could ward off inflation. Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.

There are three type of inflation:

1. Moderate inflation, the rate of inflation was only under two digits per the year.
2. Wild inflation, the rate of inflation was in two digits per the year.
3. Hyper inflation, the rate of inflation was in three digits per the year.

The fact proved, when high inflation happening, the price of gold will rise higher than inflation. It was increasingly high that inflation, increasingly high the price increase of gold. Statistics showed that when inflation reached 10 percent, then gold will rise 13 percent. When inflation 20 percent, then gold will rise 30 percent. But when inflation 100 percent, then your gold will rise 200 percent. This why you better considered to invest in the form of gold. This because of gold was believed as investment of the inflation charm. It was increasingly high that inflation, usually is increasingly good the appreciation of gold that was owned by you. But, ought to be recorded that the price of gold will tend constant when the rate of low inflation, in fact tended seldom descended if the rate of inflation under two digits. So, gold will only be good to happen moderate inflation (two digits), and will be again better to inflation happen hyper (three digits).

Investment in the form of jewellery gold was more fortunate for long-term. Because usually the price of your gold rises more far compared to when you bought it.