Why Is Your Gold Investment Worthwhile?
The long-held interest in gold as a superior form of investment begs whether it’s still worth investing in the current times.
Surely, it’s difficult to find an asset with long-term benefits sustained even in modern times.
Here we explore why investing in gold is worthwhile, especially seeing the condition of the world economy.
History of Gold
Gold has been used in trade for many centuries. It was a symbol of luxury reserved only for the wealthy. It was used to make many ornaments of ancient civilizations, honoring their rulers. In ancient civilizations, gold was a valuable and priced item.
As the world progressed, gold was melted into coins to be used for trade. Until recently, some currencies were even backed by gold reserves.
Benefits of Gold
Gold is most popularly used in making jewelry. Many countries in South Asia have an old tradition of using gold jewelry in weddings. During the wedding season, gold jewelry purchases increase dramatically.
This tradition may be fading, but it will take significant time to be wiped out. In modern times, gold has diversified and is used across different industrial sectors.
It is used in aerospace manufacturing, dentistry, and electronic sectors, to name a few.
Its non-corrosive quality makes it suitable for use in products manufactured by these sectors. Increased industrial usage of goals is also predicted with technological advances.
Economic and Financial Uncertainty
Gold is a special precious metal that is useful during difficult times such as an impending economic uncertainty or verging political crisis.
Its value is not affected by events that impact other financial instruments, so it’s useful to own when financial markets are downgrading.
Gold has the property of acting as an inflation hedge as its value does not decline when prices are rising.
It is also highly liquid, which means if you’re ever in need of cash in a short time, you can leverage your gold investments. Certain adverse economic events also boost gold’s prices.
At the time of the pandemic, currencies around the world devalued, even the US dollar, which is regarded as a powerful currency. This caused gold’s prices to rise instead of decreasing.
Methods of Investment
Some people are not inclined to invest in gold as they believe that owning it in physical form is the best way to invest in it.
That notion has been changed by advancements in financial markets. ETFs, mutual funds and IRAs are some of the ways people can invest in gold without having to possess it physically.
These instruments are backed by gold and allow the investors to trade them on the market. Investors with prior experience in stock market trading will find these methods easier to adopt.
Owning physical gold is not as difficult as it used to be. Gold jewelry does not contain pure gold as gold in its purest form is too weak to be held in a solid form.
If you are interested in owning pure gold, gold bullions and coins are a great option that you can store in private vault storage facilities.
These are usually imprinted with serial numbers and the weight of the gold for authentication purposes.
You can then use the help of precious metal indexes and international financial publications to aid your investment decisions.
You can also invest indirectly in gold by investing in gold mining companies. As the demand for gold rises, these companies’ stocks increase in value.
The negative effects which the pandemic has had on economies around the world will be difficult to reverse and take considerable time.
Economies around the world suffered as governments were forced to plunge in money to support unemployed individuals and small businesses.
As different strains of the covid-19 virus develop and more countries opt for lockdowns, there is no immediate hope of a quick economic recovery.
Economic recovery is said to be happening, but the damage suffered from the pandemic is a hefty one and will take a lot of effort on everyone’s part. As gold prices have risen to $2,000 per ounce, they are predicted to rise more.
Interest rates have also fallen, which provides an incentive for investors and encourages them to invest in gold. Other precious metals do not provide the inflation hedge benefit that gold does.
Also, the price of gold is tied to investor sentiment more than it is to supply and demand gaps. This has shown how the price of gold has risen even when demand for gold jewelry in the past year fell significantly.
Gold has provided investors protection against economic challenges, and it continues to do so.
Before choosing to invest in precious metals such as gold, it is crucial to do your research and understand if this investment option is the most viable option for you.
While investing in gold provides you many benefits such as liquidity and inflation hedging, the specific method of investment would be dependent on your budget, needs, outlook and circumstances.
At Orion Metal Exchange, our team guides you on the best precious metal to choose from for your specific needs. We help your buy gold bullions online to make the process much easier for you.
Among our various precious metal investment services include a secure private vault storage facility and precious metal IRA accounts.
Our distribution rate is higher than the industry average, and our team can help streamline the process for you while giving you real-time updates on your investment.