With the world economy not in the best shape, a lot of people are thinking that now is probably the best time to invest some of their money in precious metals like gold; but is their decision the right one? Why makes gold so special that people turn to it in times of financial crisis? In this article, you will be learning about the distinct characteristics of gold, why it makes for a great investment, and where you can get hold of it.
Why Invest In Gold?
In the past couple of decades, the currencies of countries are based upon how much physical gold they have in their holdings, this means that a country is not allowed to mint more money than the amount of gold that they own, this is known as the gold standard (it’s actually written into the Constitution). But when the US removed the dollar from the gold standard and started basing the value of their currency on the strength of their economy other countries followed suit. The problem with doing this is that when the economy declines like in times of recession, they will have a surplus of printed money; and since the currency is based on the strength of the economy, the value of the printed money will depreciate as a result.
What Makes Gold Special?
Ever since the ancient times, gold has been used by countries around the world as a means of transferring value and therefore act as a currency. In more recent times it is becoming popular once again due to the troubling state of the world’s economy. But why are so many people interested in gold anyway?
Gold is an internationally accepted form of currency, the value of gold remains constant wherever you are in the world. So even if the value of a country’s currency falls due to inflation, the value of gold that is owned by private individuals will still remain the same. This makes gold resistant to the effects of inflation, and it also makes it a great hedge to prevent your assets from falling in value.
Is Now The Right Time To Invest In Gold?
History has shown that the value of gold rises when economies decline and currencies devalue. The past 10 years has seen the price of gold rise, to only rise sharply when the worldwide financial crisis hit around 2008. And now, analysts are saying that gold is set to rise further, especially as the national debt of the US is approaching the trillion dollar mark. So before it becomes too expensive, it’s not a bad idea to put at least some of your money into gold.
It is foreseen that the value of gold will still continue to rise in the next few of years, so you should purchase some now to diversify your portfolio. Not only will you gain a substantial profit from investing some of your money on gold, you will also be protecting your assets from decreasing in value due to a weakened global economy and waning trust of the people on with more traditional investments. So go online and look for reputable gold dealers and speak to an adviser about what options are available to you with precious metals. There is no obligation and no pressure selling.