Gold is regarded for its rich history and value. Even in ancient times, this lustrous metal has been a symbol of wealth. One of the reasons why gold is coveted as the most precious metal in the world is because of its quality that can be used as jewelry, art, or coin.
Buying gold is known as the traditional way to preserve wealth, but a growing number of people consider gold to be an investment. Today, there are different ways to invest in gold. You can buy stocks from investors, go through exchange-traded funds, or buy actual physical gold. In other words: there are a lot of investing options.
If you’re still having doubts, here are five big reasons why gold is the best metal to invest in today:
Increasing Demand
The demand for gold will never decrease because it’s usually associated with tradition, culture, aesthetics, and financial protection. It has a cultural, emotional, and financial value, making it a very valuable item until these days. Almost half of gold’s production is made into jewelry, that’s why it’s easier for consumers to avail themselves.
When the demand for gold increases, its price increases as well. The growth in the production of gold benefits sellers and mining companies. Of course, increasing prices will benefit gold investors too.
No Counterparty Risk
When you invest currency in the bank, there are risks like recession, war, and even a currency crisis that can imperil the monetary system. That’s why having an investment outside the banking system is imperative to ensure that you’re still financially stable. And because physical gold held in your possession has no counterparty risk, it’s one of the investments that you can keep outside the banking system. It’s impossible to lose your long-term purchasing power when you buy gold and hold it in your physical possession. And if holding your own gold makes you uncomfortable, you and also store gold in bank deposit boxes, private vaults, or storage companies.
Gold’s tangible characteristic has advantages too. It can’t be hacked or erased, especially in this modern world wherein digital platforms can be breached to gain access to investments or wealth.
Wealth Preservation
Real gold is impervious to water and highly melt-resistant in fire. It can also retain its good physical condition over time. Gold is also known as the crisis commodity because in times of economic instability and high inflation, gold still retains its value.
No Special Knowledge Required
Purchasing gold is more straightforward compared to investing in real estate, wherein a lot of paper works are required. You don’t need to have special skills or training in order for you to invest in gold, but you do need to understand how to spot real gold from imitations.
For example, one metal that looks similar to gold is brass. The differences between brass vs gold are based on their physical characteristics and the chemical compounds that they have. So, if you’re going to invest in gold, make sure you develop a keen eye and distinguish real gold from brass to ensure that you won’t get tricked into buying a fake one.
High Liquidity
This precious metal has a high liquidity rate because when you own gold jewelry, it can be sold or pawned easily to a pawnshop, jewelry dealer, or even a private party. According to experts, it’s the most liquidated asset in the market. The process of selling it is easier and quicker than liquidating stocks.
Getting help from a jewelry appraiser will assist you to know what kind of gold jewelry you have. The value you get would also depend if your item is made from pure gold or a combination of other alloys.
Final Thoughts
There are a lot of reasons to invest in this precious metal, but just like other investments, there are also risks that come with it. People invest in gold for various reasons. Many are attracted to it because of its elegance, high value, and liquidity.
Most of all, it is one of the easiest investments to make. Investing in gold jewelry, for example, is pretty much straightforward. Aside from that, it is a type of investment that you can have in your physical possession at all times.
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Great post. There is a good chance of higher inflation this year and gold could benefit.
Thank you. Gold will definitely prove it’s worth to those who hold it in the coming years.