Is Gold Performing Better Than Major Currencies of the Worlds?
In 2020, gold was the best performing asset in the world with its highest price at $2000 per ounce. Both serious investors and first-time day traders consider gold a solid investment in case of economic disasters.
A survey of 1000 Americans found that one in six people invested in gold or other precious metals while one in four were seriously considering it.
Gold investment became a safe haven during the global pandemic and the gold mania was driven by people thinking that the easy money coming from government and central banks would trigger inflation.
Gold as An Investment Asset
When deciding between investing in currency and gold, the main factor to consider is the initial assets of the investor, their willingness to risk them, and their ultimate goals.
Even though serious investors have regarded gold as a passive asset, they agree that it gains value overtime.
While gold is not a dynamic investment, it has stable value, while other investments such as those in currency are shaky.
In the previous century, the price of gold rose on average by 1.1% per year while the price of US stocks rose by 6.5%.
Gold prices surged during the stagflation of 1970s and rose more than sevenfold during that decade to peak at $850 in the early 1980s.
It also increased after the global economic crisis of 2008 and peaked at $1900 in 2011.
Comparison of Gold and US Dollar
Gold is a much more stable investment compared to the dollar which had a very drastic slide in 2020.
In March, as the coronavirus pandemic began in the US, reserve currency benefited from a three-and-a-half-year year high. However, in later months, the dollar value declined to a two-year low.
In the middle of 2020, the dollar lost 4.9% against the euro, 2.5% against the yen, 4% against New Zealand dollar, and 6% against the Swedish krona.
The dollar’s pain has resulted in the gold’s gain. The value of gold increased to its highest point at 1941.90$ per ounce in July 2020.
Gold also moved higher with stocks and the S&P 500 moved up to 4. 2% in the same month.
Future of Gold
Experts have predicted that gold has more room to increase in value. A typical investor has around 3% gold in their financial portfolio which is less compared to the 1980 speak at 6%.
The gold market comprises 16% the size of global stock markets which is also less compared to 40% in 2011 and 200% in 1980.
Take advantage of the rise in gold’s value by investing in gold to make money. Orion Metal Exchange has gold coins along with silver, platinum and palladium. Buy gold bullions online and increase your financial portfolio over time.