Why is gold a good investment for the future?
Investors are incredibly careful while investing in physical assets like gold. The reason for this is simple – gold doesn’t earn interest. The exchange of cash for gold has been part and parcel of investment life for decades. The yellow metal has a high value and rich history, attracting many people to invest in digital and physical forms.
When you take into account all the political upheaval, social conflict and uncertainty. There’s no mistaking why more and more of us look into investing in gold, especially as it’s seen as a safe haven. Also, with gold prices continuing to soar, there’s no better time to invest in gold than right now! Here we will look into the common reasons why it makes sense to invest in gold this year and all the potential benefits you’ll receive from making this move.
Tangible Asset
Gold is a physical representation of wealth which can be passed down from generation to generation. In fact, this yellow metal can become stored in several physical forms. These include bullion, jewellery, ingots, bars and coins. Jewellery will attract VAT so is a less compelling option than bars and coins which are VAT exempt. You can purchase gold Britannia coins from dealers like Physical Gold, which have the added benefit of being free from Capital Gains Tax (CGT) too. They offer a secure and simple way of investing in gold bullion and gold coins. Gold is a great physical asset to own because it’s durable, rare, and difficult to produce.
Also, the metal has inherent value. This means if you own gold, you’re able to store your wealth in a physical form and pass it down to future generations. When you accumulate physical gold, you build a pool of assets that can become gifted to loved ones. The same can’t be said for investing in gold ETFs. While they’re a convenient way to invest in this metal, there are drawbacks too. One of the main being you don’t actually own the gold!
Global Currency
Gold is a currency used all over the world that isn’t tied to a specific government or country. It’s accepted in most countries and has been a global medium of exchange for centuries. Because gold is plentiful enough to create coins but rare enough so not everyone can produce it, gold has been an ideal form of currency since the history records began.
The reason gold has value is simple – because it’s scarce and people believe value that. Gold’s worth becomes simply determined by the market. Sure, governments may try to muscle in and control its value. Whether it’s through stockpiling the metal or setting prices, it’s the market that decides how much gold is actually worth. This is why gold prices can be incredibly volatile.
Time-Tested Asset
As we’ve briefly touched on, gold has become used as a currency form for several centuries. With that said, gold becomes also considered as one of the planet’s most trusted assets. Precious metals are timeless, universally admired, and hold intrinsic value. There are numerous reasons for this.
Gold doesn’t tarnish or corrode. It’s also scarce, non-toxic and has a relatively low melting point. This makes it easier to become turned into jewelry or coins. If you want to convert gold into money, you’re able to visit a dealer, bank, or jeweler to trade it in. While the value of gold will fluctuate, given it’s a scarce resource and has intrinsic value, you can be confident you can swap the metal for other assets whenever you like.
Performs Brilliantly in Economic Uncertainty
During periods of economic uncertainty, the value of gold shows no signs of slowing down. In fact, its value continues to rise and rise. This is because gold is a valuable resource that isn’t tied to the performance of a particular economy. Gold is known as a safe haven during periods of inflation and recessions. When the stock market crashes, investors look for stable investments. As gold prices start rising, investors look into gold to protect their cash.
Gold is seen as a reliable investment thanks to its scarcity. It’s also considered less volatile than other investments, which makes it a more stable choice for investors looking to protect their hard-earned cash. Physical gold is a popular investment for those saving for retirement too.
Inflation-Proof
Gold isn’t subject to inflation like other forms of currency. The metal is resistant to the powers of inflation as it’s a finite resource and there’s only so much of it on the planet. You can’t simply print more gold like Government’s do with paper money. Thanks to the supply and demand laws, they’ll always keep the value of gold stable because individuals will always want to buy it. Gold is an excellent investment during periods of inflation as it retains its purchasing power.
When the cost of goods and services rises, the value of money decreases. This means if you’ve saved up a certain level of cash, it will buy you less than it would’ve before inflation struck. Gold doesn’t lose its value in times of inflation. In fact, the opposite occurs! If you’re looking to invest in gold during periods of inflation, you can become assured your investment will still hold value, even when prices begin to dip.
Inversely Related to Stocks
Gold isone of the few assets that isn’t positively correlated with the stock market. When the stock market is thriving, gold prices decline. This is because investors are more interested in investing their cash in stocks, rather than gold. When the stock market isn’t doing well, gold prices shoot up as investors sell their stocks and splurge on gold instead.
In other words, gold becomes seen as a hedge against economic instability and inflation. Which is why it’s not normally positively linked with the stock market. Gold is a brilliant investment for anyone who wants to lower their risk exposure.
Financial Privacy
Gold is a wonderful way to protect your financial privacy. This is because it’s an asset that isn’t tied to financial institutions or particular countries, which makes it harder for governing bodies or institutions to monitor your gold holdings. What’s more, if you invest in physical gold, you’re able to store it in a secure place outside of the banking system. This stops anyone from having the power to seize your assets should they come after you.
Those nearing retirement should look into investing in gold as it provides financial security during their golden years. Those worried about worldwide government control over their money may benefit from investing in gold too.
Requires No Specialised Knowledge
Are you able to spot a real diamond? Can you look at two paintings and determine which is the real Van Gogh? You’ll be happy to know gold bullion requires none of this. In fact, there’s no equipment, training or special skills needed to invest!
Some people are hesitant to invest in gold as they feel they need to know the ins and outs of the sector. The good news is you don’t have to! While a bit of knowledge is helpful, you only need to check out a brief guide or two to understand the basics of investing in gold. Reputable gold dealers will also be able to guide you though the best gold coins or bars to invest in.
In the unsettling world we live in today, it’s easy to see why more and more people are turning to gold as a stable investment. For anyone who is worried about the looming recession, there are numerous reasons and benefits investing in gold will bring.
Why is gold a good investment for the future?
