There are various viable reasons for investing in gold:
Gold as a hedge
Central banks fueled todays global economy with trillions of new printed money to keep the economies going, which inevitably leads to inflation. Interests and costs are increasing which leads to further recessions. Investing in physical gold could well be the ultimate insurance in these turbulent times. Historically it is proven that investing in gold can be used effectively to insure against inflation, deflation, interest rates, stock market fluctuations and currency instabilities. The demand for gold is stable because holding physical gold is an effective way of hedging other investments such as stocks, bonds and property. Gold is a physical asset, a timeless asset, an asset that cannot be devalued by central banks by the government simply deciding, in case of currencies, to print more of it through Quantitative Easing. Even in the most extreme and unlikely scenario that the banking system should face collapse and paper money lose all its value, gold could be used to buy and trade yourself out of trouble.
The instable outlook for the global economy suggests, based on historical developments, further long-term growth of the value of physical gold. Physical gold investments are recognized and known as non-speculative, safe, a low-risk security asset for your and your family’s future.
The unpredictable nature of the global economy suggests further long-term strength and likely rises in the global gold price, but these potential profits should not be the main reason for investing in gold. Gold should be viewed as a non-speculative, safe, long-term method of safeguarding your wealth. Owning gold offers a unique and interesting element to your portfolio, offering an opportunity to spread the risk from the uncertainty of other investments such as stocks and shares, property, and currencies, which may be under-performing.
Gold as a safe haven investment
For many centuries investors have been aware of the importance of gold as part of a well-balanced investment portfolio. In addition to offering wealth diversification, gold is a world recognized safe haven investment for investors offering the ultimate insurance and protection against inflation and insecure global economic situations. Besides proving to be a successful preserver of wealth, high gold prices and ongoing global demand for gold outperforms almost all other forms of investment.
After the financial banking crisis of 2008, we are confronted with new unprecedented economic uncertainty during the worldwide Covid-10 pandemic. Due to the quantitative easing of central banks, national debts increased dramatically, which leds to lower interests followed by global inflation.
After the fallout of Brexit, the US-China trade war, complex relationships in the Middle East, impact of climate change and recently, the invasion of Ukraine by Russia change all present major economic challenges still to come, for our global economy. Gold offers a vital safe haven which should be part of any diversified investment portfolio.
As an example, Russia’s invasion of Ukraine seemed unthinkable for modern times, but has reminded the world that war is still a potential threat. The geopolitical tensions between countries like the US, China, Russia, and North Korea have driven the global economy for years and it is unknown what we can expect for the coming years.
Physical gold turned out to be the ultimate insurance and, given its ability to maintain a high value, should be viewed as an essential part of everybody’s investment portfolio.
Consistent demand for Gold
Another reason to consider to invest in gold is demand. While the world’s central banks are increasing their gold reserves, and general demand for gold in many countries is higher than ever before, many financial experts are stating that gold will remain a highly valuable commodity for decades to come. The World Gold Council have shown a year-on-year increase of demand for gold and silver for both investors and for industrial purposes. For investors it’s about preserving wealth and diversifying their portfolios to get strong returns and for industry, we’re seeing more and more gold and silver used in modern technology, whether it’s electric vehicles, smartphones or solar panels. Gold investment is in particular experiencing growing demand in China and India but also European countries including Switzerland, Germany, France and Turkey have experienced record uplifts in gold retail demand.
With both consumers and Central Banks in many of the world’s most powerful economies buying unparalleled amounts of the precious metal, it is advisable to invest in gold.