Reasons to Start Investing in Gold

People are running away from other investments to invest in gold due to the many benefits that this investment is associated with. The precious metals have gained popularity most notably among those saving for retirement. The reasons why people invest in precious metals are mentioned below homepage.


Why gold?

Gold holds its value unlike assets or currency that depreciate with time. It is a good way to maintain your wealth throughout ages as it appreciates each day. You may also consider the weakening of the dollar in the stock markets. During the period 1998-2008, the dollar declined making gold prices shoot up. During that period, the dollar fell in value against other currencies. The price of gold went from $1000 to $1900. Those who had gold bullion at that time made huge profits. The dollar can decline due to a number of reasons such as trade deficits and huge budgets.

As the cost of living goes up, the prices of gold increases. Gold is thus the best way to fight inflation. A resolved look at the worst inflation period in the US leaves you wanting to start investing now. The years 1980, 1979, 1975, 1974 and 1946 had Dow Jones average real returns fall to -12.33% while those of gold increased to 130.4%. During the 1930’s deflation, gold prices soared as other prices went down.

Another reason to invest in gold is because of geopolitical uncertainty. When there is tension in the world, all other investments can never match gold investments. This is witnessed in the gold price movements this year as a result of the European Union crisis. Another reason is the expected rise in gold prices due to supply constraints. From the year 2000 to date, gold production in gold mines has been falling notably. In the period 2000-2007, gold production fell from 2,573 metric tons to 2,444 metric tons. There is an increased demand for gold as emerging market economies increase their wealth. In many countries for instance India, gold is part of the culture thus putting India among the largest gold consuming countries in the world.

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