Over the decades, in and out of different economic seasons, gold has maintained its value over many decades. Gold is the most valuable metal globally, which people trust very much and keep as wealth insurance during tough times. Gold has a unique appearance, and it serves various purposes, and it influences people’s social status. Many people have invested in gold following its stability in the past years. Research shows that gold prices will always go up. True to its nature, gold is the only metal of its kind, and people have put a lot of faith in it. Below are some insights about the gold investments that revolve in the gold industry useful in making the gold investment decision from GoldIRAInvestmentCompanies.org

1. Holding value

Since the ancient days, gold preserves wealth. Gold is also a form of wealth used to pass on an inheritance. Due to its unique features, non-corrosive and melting quickly, gold has gained popularity as the only metal that has survived against the economic tests and upheld its value over a long time. Unlike notes and coins, gold has stood unshaken by the financial crisis that has hit the world economy severally.

2. Prices of Gold

The U.S. dollar has been one of the reserve currencies in the world for ages. Nevertheless, the dollar has risen and fallen in the past, and maybe right that history may repeat itself. Between 2008 and 2012, when the U.S. dollar weakened against other currencies, many people went to buy gold, which led to a rise in gold prices due to its demand. The fluctuations in the value of the U.S. dollar lead people to use gold as a reserve metal. It is an assured investment that you can never sell at a loss.

3. Inflation and deflation Hedge

Inflation has the potential to bring down any strong economy following a rise in the costs of living. Gold does not suffer the effect of inflation; instead, when inflation begins to wear down economies, people invest and begin to buy gold to preserve their wealth. Gold is a stable store of wealth, especially in cases where inflation is predictable. In the event of a price drop of commodities and the purchasing power goes up, gold prices are not affected. The trade of gold remains stable enough and preserves its value.

4. Scarcity

Gold production has been on the decrease since 2000. Gold mining takes a lot of time to begin the mining process and successfully produce gold for the market. In 2019 gold production reduced by one percent, and this decrease may go on in the coming years. When production decreases, the demand unsettled. Unsatisfied demand results in a price increase of the gold circulating in the market, which increases returns.

5. Demand

Gold will always be on-demand, and mostly, the need is continually rising. An increase in demand for commodities amongst different investors results in an increased demand for gold. Consumer habits like jewelry demand result in increased demand for gold. For example, every year in October, when India has many weddings going on, there is a rise in gold consumption, boosting gold prices. Other investors who buy gold for saving purposes may contribute to the high demand for the gold. For example, in China, gold bars are a form of savings and more savings results in high demand for gold bars.

6. Correlation to other financial investments

Investors have used gold to complement their investment in stocks and bonds because they negatively correlate. The nature of their relations results in a reduced risk of investment. Practically, when the stock value depreciates, the investor can bank on the gold value to rise, and when stocks appreciate, the investor will remain on the safer side.

7. Intrinsic value

Since ancient times, the intrinsic value of gold has been unshakable. Its current intrinsic value is not comparable to the market value because it is a non-cash flow. Coins and notes can artificially undergo adjustments, but gold’s inherent value is constant in the assumption that people will always accept gold without digging into its value.

8. Gold and market liquidity

Gold is a liquid asset, and because it is accepted globally, so it is effortless to convert to cash anywhere in the world. Any investor can also buy and sell gold anywhere in the world as they desire. This liquidity gives investors the platform to exchange money for gold and vice versa as preferred.

9. Gold insures investors against political decisions.

There may be many conspiracy theories around why governments freeze bank accounts and cut cash flows for some people, especially when an investor is undergoing investigations. An investor can alleviate the impact of this by selling off a portion of their gold. There have been incidents where the governments of different states pass laws that may impact their money value. In cases such as this, gold will stand the harsh political decisions test regardless of the investor’s location.

10. Gold is easy to store and maintain

Gold is non-reactive in the open air, and this makes its maintenance even more straightforward. Gold’s value can be in a small bar and be placed within the house or in a safe box, unlike having stacks of money in your safe box. You will save on space and the value of your asset. Investors do not require special techniques to take care of gold.

Gold has protected investors’ wealth by maintaining its value, and due to the enormous returns the investors get, they can stabilize their wealth. Gold value is not artificially adjustable, and so people have used it to get a status quo and demonstrate power. The higher the amount of gold possession one has, the higher the power. Gold’s influence on power and social status applies to different countries and also people categorically. Investors can use gold as a form of trade instead of dealing with bulky cash transactions, and in other cases, gold can be used as security to acquire other assets. Looking into these insights, an investor can measure the worthiness of the investment and its risks.