Is Gold a Good Investment?

Why Gold is gold a good investment

Each investor looks for investment that is low risk.  If you are interested in gold, you must be asking yourself is gold a good investment? Gold is an ideal long term investment as it does not become worthless unlike a bond or stock whose value is affected by performance and practices of an organization.

Gold has always been an extremely sought after metal for coinage, expensive jewelry and other forms of art since its inception. Gold coins and bars are known to hold on the value or increase even if the manufacturers close shop. The reason is that if there is no production, gold coins and bars become a collector’s item therefore increasing their value. These are the reasons why gold is good investment:

Gold is Limited Supply

Gold unlike paper currency is in limited supply therefore does not lose its value. The limited natural supply also shields gold from exaggeration by inflation or devaluation. People have now realized that there is no alternative for gold therefore when you buy it you have some sense of security.  If something happens to market prices and lowers the value of paper currency, you will still be in possession of very valuable material with a price that cannot be determined by governments at various countries.

Historical Value

Gold is not man made therefore there is no person who has ability to make as much as he would want.  Gold can only be extracted from few mines thus this reason why it has retained its worth even after being in use for more than 5,000 years.

Widespread acceptance

There is a global acceptance that gold is precious and expensive metal. It is simple to invest in gold as it is a form of an accepted currency at all parts of the world.

Resistance to Economic Recession

During economic recession, gold has emerged to be one of the most reliable. This is because the market believes in its ability not to fall to fluctuations in the economic trends like other commodities or paper currency.  The ability to withstand recession has made gold a super investment at times of crisis.

Valuable trade item

In the last few years, gold jewelry business has become more popular as a small sized business. There are many people especially women who have made a career out of buying their favorite gold jewelry, get new designs then sell them at higher prices. Gold is a fine metal for jewelry business because of its durability, portability, easy divisibility and high value. The increase of such businesses has led to higher demand for gold and an increase in its price.

Dollar rate

Gold follows the US dollar rate which a strong currency, the value of the gold increases alongside dollar exchange. It would therefore be easy to know the right time to buy or sell gold by just observing the performance of US dollar.

The only challenge with gold is to safeguard against mishandling. During delivery, and transfer between countries, gold might be harmed or tarnished thus lose a bit of its value. Despite these challenges,   investment is gold does not falter because restricted supply and stunning looks make it perfect means of exchange.

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