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Does It Still Pay to Invest in Gold?

Does It Still Pay to Invest in Gold

In 2021 alone, the US ranked first on the list of the top ten countries to own the world’s gold reserves. The US held 8,134 tons of gold in 2021.

Some people still like to think of gold as a barbaric relic, having no monetary value in these modern times. They stress that paper currency is the money of choice, whereas the only benefit of gold is jewelry making. Then some believe that gold is a unique asset because of its intrinsic value and hence, a good investment choice.

Why is Gold So Popular?

Picture of gold bars

Investing in gold protects investors from the volatility and uncertainty of the stock market. Gold and stocks negatively correlate, so gold investments are safer for portfolio diversification. Why is it safer? Gold decreases instability while increasing long-term returns. However, you cannot use it to generate regular income.

Investors choose to invest in gold during periods of stock market uncertainty or when the stock market is facing an all-time low. Even though gold investments offer lower returns than equity, they still should be a part of your portfolio.

Physical Gold vs. Digital Gold

The physical and paper gold prices work in conjunction with one another. However, there’s a big difference between their overhead costs. For instance, if you decide you buy a gold chain worth five thousand US dollars, the price of that chain would include storage costs and jewelry-making charges as well. These overhead costs will reduce the effective return on gold investments. When you decide to sell the chain, you will not get five thousand dollars for it, but you will get a lesser amount back as apart from the overhead costs, purity of gold and other standard deductions will be applied.  

So from an investment point of view, physical gold does not make much sense, and it’s better to opt for paper gold instead. We at Orion Metal Exchange can help by opening up a gold IRA account for you.

Are Investments in Gold Worth It? 

We already know that gold and the stock market are counter-cyclical. Last year we already saw a spike in gold prices, and they’re predicted to continue rising this year. In a way, gold is a perfect hedge option as it’s not impacted by the same things as the stock market. Hence it’s wise to invest in gold. 

However, returns on gold have proved to be erratic at times. This inconsistency makes it hard for an investor like you to invest. This is where we at Orion Metal Exchange come in. Get in touch with our team of experienced financial advisors regarding gold investments, gold IRA investments, and precious metals IRAs, amongst other services offered.

Get in touch with us, and we can get started with your gold investment portfolio straight away.

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