What makes a gold such a good investment?
Gold has been widely used before the invention and usage of paper money (fiat money).
Research stated that its usage was detected for over 3000 years;
How does it retain its appreciated value?
Its characteristics are what make it unique
It is simply beautiful
Therefore, unlike paper currency, coins or other assets, gold has maintained its value through time.
People perceive gold as a way to preserve their wealth from one generation to the next.
Why should you invest in gold?
Weakness of the U.S. dollar
Although US dollar is one of the world’s most popular world currencies, the currency’s value has previously dropped rapidly against other currencies, most recently this happened 1998 and 2008.
Gold prices soared during these periods as investors were selling of cash currencies and were then looking to invest in the more secure gold. This obviously increased demand greatly and therefore spiked gold prices.
The price of gold nearly tripled during the years of currency downturn, reaching around $1000 for an ounce of gold. Meanwhile in 2008 – 2012, the price of gold escalated and went up around the $1800 – $1900 mark.
Increase in demand
In recent years an increase of wealth from emerging markets has also boosted the demand for gold. In some countries, gold plays a significant part in culture. In example, in India, where the wedding season in October is traditionally the time of the year where there will be the highest demand for gold.
Meanwhile in China
Gold bars are a traditional form of saving, where the demand for gold has been
Investment wise, many individuals are beginning to see gold as a stable reliable commodity to hedge against inflation and at the same time provide an insurance policy for currency.
Gold should be an important part of a diversified investment portfolio, as its price generally increases in response to events that cause the value of paper investments, such as stocks and bonds, to decline.
Although the price of gold can be volatile in the short term, it has consistently maintained its value over
the long term. Through the years, it has served fairly as a means to hedge inflation, as well as the erosion of major currencies, making it an investment worth considering.