Top 8 Reasons to Invest in Gold
Investors have become more aware of the importance of adding gold and other precious metals to their investment portfolio. With recent market changes, and the state of the economy, Gold investments including use of IRAs and 401(k) dollars where applicable have become increasingly attainable and important. Here are eight reasons why you should consider investing in gold.
1) The Weakness of the US Dollar.
The US dollar has been on a steady decline in value for the past few years. This is due to a number of factors, including trade and budget deficits, as well as an increase in the money supply. The term “money supply” refers to the amount of currency available in a particular economy.
As the world’s largest reserve currency, the US dollar often outperforms most major currencies on an annual basis. However, its value in relation to other currencies can lead people to invest in gold instead. Gold prices nearly tripled between 1998 and 2008, reaching $1,000-an-ounce by early 2008. Between 2008 and 2012, the price of gold nearly doubled from $ 1800-1900 per ounce.
Many investors are choosing gold as a way to protect their investments against the weakness of the US dollar. Here are the top 8 reasons to invest in gold.
2) Gold Has A History Of Maintaining And Increasing Its Value.
Gold has been increasing in value for the past 20 years. In 2020, it surpassed $2,000 USD per ounce and experienced some volatility during the pandemic period. As tensions escalate between Russia and Ukraine, gold is increasing in value rapidly due to geopolitical instability. It recently surpassed the $2000 USD per ounce mark again in March of 2022. The stock market is experiencing volatility and oil prices are skyrocketing. The overall economy seems to be in a rut with inflation persisting.
3) Gold Is A Proven Hedge Against Inflation.
Gold has been a valuable resource for centuries, and for good reason! It is a proven hedge against inflation. In times of economic uncertainty, investors tend to flock to gold as a safe-haven asset, which drives up its price.
This makes sense when you think about it: as the dollar goes down, people turn to gold as a way to protect their money. And because gold is such a rare commodity, its price tends to rise over time. Even when inflation exceeds the interest rate, individuals who invest in gold have seen a real rate of return. Since fiat currency was detached from the gold standard, it has inflated and lost value while the scarcity and usability of gold remains.
That’s why so many people choose to invest in this precious metal–it provides stability and peace of mind during difficult times. If you’re looking for an asset that will hold its value during tough economic conditions, then gold is definitely worth considering!
4) Bullion Is Seen As A Safe-Haven During Times Of Political Instability.
Gold has always been seen as a valuable commodity, and there are many reasons for this. One such reason is that it is seen as a safe-haven during times of political instability. This means that people tend to invest in gold when they are worried about the future of their country or economy.
Another reason why gold is so popular is because it comes from natural resources. Gold production has been on the rise in recent years, which has led to an increase in its price. In addition, much of the supply of gold comes from central bank sales. This means that there is not as much available supply as there used to be, which drives up the price even more.
5) Global Government Debt Is Skyrocketing.
It’s no secret that global government debt has been on the rise for a number of years now. In fact, it has increased by over $120 trillion since 2007! This makes many investors and savers nervous, as they start to worry about where to allocate their money in order to preserve it.
Gold is popular across cultures and its value tends to remain stable even when other markets are fluctuating. Additionally, there are a number of special occasions in which gifting gold is customary- such as weddings and festivals in India, or barters and trades for gold in Western countries.
The price of gold will continue to be based on its popularity and demand around the world. So far, it doesn’t seem like this trend is going away anytime soon- in fact, it could potentially get even bigger! However, we can’t rule out short-term downturns caused by events such as the coronavirus pandemic.
Gold remains a valuable asset during tough times and offers investors stability during uncertain periods.
5) Gold Demand Is Increasing.
Gold demand is increasing as emerging market economies have more wealth. The gold price has been surging due to increased consumption in India, as well as China and other countries with strong cultural ties to the metal. The demand for gold is expected to increase, given the price increase. Gold can be an investment when it’s in emerging economies with a growing middle class.
6) The World Gold Supply Has Been Shrinking.
Did you know that the world gold supply was shrinking? Business Wire reported that from 2020 onward with Covid lockdowns, and other factors there was an overall slowdown of Gold production. Q1 of 2022 has marked a return to production and growth also impacted by the war in Ukraine. See Business Wire article — ResearchAndMarkets.com
7) Gold Has Universal Value
Gold has been used as a form of currency for centuries, and it still retains its value today. This is because gold is a universal hedge–meaning that it can be used in any country without losing its worth. In addition, gold is easy to transport, making it ideal for use in times of crisis. If the local currency sees a decrease in value, investors can use gold as collateral to offset those losses.