Why People are Choosing to Invest In Gold

Here is how people are taking advantage of low gold prices to make a great investment.

One of the most popular and oldest currencies in the world is gold. For centuries, it has withstood the test of time as a store of value. Today, it’s one of the most solid financial instruments an investor can hold.

The best part is anyone can trade gold since it’s a low-risk investment. However, there are some fundamentals you need to understand before you diversify your portfolio.

Gold is a Valuable Asset

We can trace the roots of gold back to 4500 B.C.E where it was common in gravesites, buried among the remains of great rulers.

Throughout history, gold has been used to symbolize power and wealth. Gold was also melted to create coins and exquisite jewelry.

We can go on and on, explaining the role of gold in ancient times, but we rather not. The bottom line is that gold has always been valuable.

One surprising fact is that in the 20th century, most currencies around the world contained traces of gold. Although today’s paper currency is gold free, Gold is still a crucial piece of the world economy. Banks, financial organizations, and the International Monetary Fund have gold reserves and supplies.

Since gold is stable, it’s used to preserve wealth even during economic downturns. Gold has shown a long-standing value for centuries and it has retained its attractiveness, that is why it’s considered a valuable commodity even today.

There’s Always High Demand for Gold

Besides being a highly prized asset globally, gold demand is always high. People all over the world love gold, but in different forms.

Jewelry accounts for 50% of global gold demand, while physical bullion accounts for 40% of the demand. Physical investments include gold bars, coins, and bullion, and they’re the most common methods of investing in gold.

Since this commodity is popular and attractive, its demand is constant. Gold attracts investors from all backgrounds, from beginners to experienced investors as well as large financial establishments.

Gold demand can remain stable, even during an economic downturn or when the financial markets are volatile. Even though gold can exhibit a temporary reduction in demand, its price and demand often run opposite to the economy, especially during hard times. When the stock market is down, this precious metal can rise in both its price and demand. This constant demand always impresses gold investors.

Gold Is More Stable Than Other Investments

When investing, the biggest concern that you may have is about the risk vs return. This is quite understandable, especially if you are investing your hard-earned money into traditional investments (mutual fund, stocks, and bonds) that are prone to losses.

Unlike traditional investments, gold offers you low risk and high returns. Even in hard economic times, gold investments usually perform well. For instance, during the 2007- 2008 recession, the stock market fell by 36%. But gold took the opposite turn – it’s price increased by 25%.

Gold is an investment that can withstand economic downturns and uncertainty. It’s very stable, that’s why investors should consider holding it.

Furthermore, gold investments are among the best way to diversify your investment portfolio. When you diversify your portfolio, you stand a chance of making returns even when the market takes a downturn. By adding gold to your portfolio you can balance several concerns, including falling dollar strength, loss of wealth, and inflation.

Ways to Invest in Gold

Generally, you can invest in gold in three common ways. These ways include:

Investing in gold exchange-traded funds or mutual funds
Buying physical bullion or coins from brokerage firms, banks, dealers, or the U.S. Mint
Trading gold futures and options in the commodities market

Within these general strategies we’ve mentioned, you’ll find more ways to invest and purchase gold.

The fact is, you have so many options to choose from when you’re ready to invest in gold. But first, ensure you’ve done enough research to learn about all the options you have at your disposal.

How to Make Your First Investment

Over and over again, regardless of how bad the economic downturn has been, gold has prospered. It’s an incredible commodity that promises high returns and low risk. Gold has shown huge financial potential for centuries, and that will not change anytime soon.

The strategy you will use to invest in gold depends on your financial situation and your investment goals. Also, it is wise to consider all the factors that could influence and shape your finances.

Research the benefits and the downside of the different types of gold investments available in the market. Once you have all this information, then you can make an informed decision.