5 Reasons Why Buying Gold is a Good Investment
Gold has had a long-standing history with human societies and economies from around the world. In fact, gold flakes have even been found in Palaeolithic caves dating back to 40,000 B.C., and gold also played a huge role in ancient Egyptian mythology. You can tell that it was highly valued because it was even used to make the capstones on the Pyramids of Giza.
It’s crazy to think about how gold has held its value over all these years – from ancient civilizations to the 1870s gold rushes and beyond – but this is exactly what makes it a great investment. Though gold will not earn you any interest or dividends, because of its intrinsic value, it will eventually be worth more than what you bought it for – stop by Muzeum to learn more and find out how much your gold is worth.
Here are five reasons why it’s always a good idea to buy gold.
1. A History of Value
As already discussed, gold has maintained its value throughout human history. Since ancient times it has been treasured because it doesn’t corrode and can be easily melted and manipulated when heated. Because of this many people even to this day see gold as a way to pass on their wealth from one generation to the next. As long as people continue to view this precious metal as something of value, it will always be worth something for years to come.
2. Crisis Commodity
Gold retains its value in both financial and geopolitical uncertainty even when other investments fail. For example, during a deflation period (when the economy slows down and is burdened with debt), the purchasing power of gold will rise in response as people seek to hoard wealth in a physical (more reliable) form. The same is true when world tensions rise and confidence in governing bodies is low.
3. Hedge Investment
This precious metal is viewed as an excellent hedge (a method to reduce risk) against inflation. Historically it’s been seen that gold typically appreciates during periods of high inflation, despite stock markets plunging. When fiat currency loses its purchasing power, gold tends to be priced in those currency units and thus investors turn to it and away from a weakening dollar.
4. Portfolio Diversification
A diverse investment portfolio involves various assets that don’t correlate with one another. This means that when the economy causes one asset to lower in worth, another one will rise and offset the loss. A diversified portfolio is created to offset risk, and gold is a great asset for this reason as it tends to gain value in times of financial crisis.
5. Rising Demand
Because of emerging market economies there has been an increase in demand for this precious metal. India, for example, is one of the largest consumers of gold in the world where it is used for many purposes. Investors have also become increasingly interested as they see the worth of putting their funds into commodities.
From this list it’s clear that gold is a worthwhile investment, so wise investors should definitely look at adding this item to their portfolio in order to secure their wealth for years to come.