Understanding The Value of Gold
The following article is created by Orion Metal Exchange for the benefit of our investors and perspective investors alike. We seek to provide relevant content concerning precious metals and the impact caused by the economy and geopolitical trends that will most likely place impact on your financial future. If you are interested in learning about precious metal investing, call 1-800-559-0088, for a FREE investor kit.
Gold has been utilized as a store of value for thousands of years. Gold is considered by many as the best way to protect against the regressive effects of inflation. Here are several reasons why.
1. The Cost To Produce
Gold is a tangible asset and there is a cost to produce a tangible asset. When inflation rises, the costs of employee wages, energy, and equipment rises, and this is why the value of gold continues to rise with inflation over time. This is why investors utilize gold as a hedge against inflation. When the value of money decreases due to inflation, the value of gold increases, making it a reliable choice for investors looking to safeguard their wealth.
2. Physical Properties
Gold is attractive in color and brightness, durable to the point of virtual indestructability, and highly malleable. Gold does not react with oxygen and will not corrode over time. Gold is an excellent conductor of heat and electricity. One ounce of gold can be stretched into a wire 2000 kilometers long or beaten out to 300 square feet. Making gold an excellent alternative to fiat currency in exchange for goods and services.
3. Global Liquidity
Gold is recognized by central banks and governments alike as a store of value. Many sovereign mint coins, like the American gold Eagle coin, are legal tender designated. Individuals can exchange sovereign mint produced precious metal coins for goods, services, and fiat currencies anywhere in the world. Gold is the ultimate global currency.
4. Portfolio Insurance
Precious metals have a comparatively low or negative correlation when compared to stocks and paper assets. When the values of other assets decrease, precious metals will likely rise in value and promote portfolio balance and stability.
Precious metals are not prone to mismanagement or mishandling by corporations or government entities. Precious metals are not subject to government policy changes. For example, when you own a gold Eagle coin, no one can borrow or loan against your gold coin. Physical precious metals are free from the risk associated with debt.
FAQ: Your Key to Understanding!
What role does gold play in the global economy?
Gold plays a multifaceted role in the global economy. It serves as a store of value, a hedge against inflation, and a safe haven asset during times of economic uncertainty. Additionally, it is used in various industries such as jewelry, technology, and healthcare, contributing to its demand and market dynamics.
How does Orion Metal Exchange differentiate itself from other gold investment platforms?
Orion Metal Exchange stands out by offering live online product purchase pricing, ensuring transparency. With fees often less than half of competitors, it provides a fee-free buyback policy. Clients benefit from a dedicated in-house IRA department and can guarantee transaction pricing via phone. Prioritizing long-term relationships, it delivers added value and top-notch customer service.
How does inflation affect the value of gold?
Inflation typically boosts the value of gold as it erodes the purchasing power of fiat currencies. Investors turn to gold as a hedge against inflation, seeking to preserve the real value of their wealth. Consequently, during periods of inflation, the demand for gold often increases, driving its price higher.
Orion Metal Exchange presents this article for both our investors and perspective investors, offering insights into precious metals and their relevance amidst economic and geopolitical trends. To explore precious metal investing further, dial 1-800-559-0088 for a FREE investor kit.
