Even though gold has been a backstop for currencies for decades, it is still a valuable commodity. Gold can still play an important role on international markets. It can also be used to leverage trade with less volatile currencies, as gold tends over time to retain its value.
It is not enough to have gold on the international Monetary Fund’s reserves and other major banks around the globe. These organizations hold a fifth of the global gold above ground. These organizations are also working to increase their gold reserves.
These organizations know that gold investment is worthwhile. Here are some reasons that investing in gold makes sense for individuals.
Preservation of wealth
Gold has been the gold standard in wealth preservation and building for many decades. Paper currency is not comparable.
To be successful long-term, you need a diverse portfolio of investments. Many people purchase hot stocks without knowing what they are purchasing. Although this can be lucrative at times, you need to remember the 2008 financial crisis to see that stocks are not the only investment you should make.
It is common for precious metal prices rise when stock prices fall, but this is not always true. One thing is certain, however: stocks and metals do not necessarily correlate.
The Gold is Safe from Political Upheavals
Gold has always been the best way to preserve wealth in turbulent times. There are many governments. Wars break out, or peace treaties are signed. These agreements can reverberate for many years. Economies can fall, but then rebuild their strength.
If you have your own gold stash, which is simple enough to make with a small investment now, then it will serve as an economic backstop for the chaos and uncertainty caused by political instability around world.
There are many ways to invest
The popular investment in gold is to use it as an inflation hedge. Your individual risk tolerance and goals will determine whether you choose to invest in stocks, ETFs, or physical gold. While gold bullion is immediately available, it has a higher premium than coins that have long-term stability because of their numismatic worth.
ETFs can be described as mutual funds that trade on stock markets like any stock. ETFs can be purchased by individual investors through brokers. Mining companies can also sell their shares if they wish. ETFs are a convenient way to invest in precious metals without having to track down bullion dealers.
You can also purchase gold bullion or gold coins. This type of investment should be handled carefully. You should insure your physical gold pieces and keep them safe at a bank.
According to the World Gold Council, jewelry is the most common way to purchase gold. Half of the world’s demand for gold is made from jewelry. The value of jewelry is often determined by its weight. The weight of a piece is one aspect of its value. Another is the karat value. The range of gold karats is between 10k to 24k, with the 24 karat representing pure gold. Only 42 percent of the gold jewelry sold today is pure.
For many years gold has been a reliable investment and will continue to be for many more years. One of the few commodities that can hold its value in times of falling stocks and real estate prices is gold.