You probably know that gold is one of the most prominent and most respected commodities throughout the world because of its significant history and value.
You have probably known that gold appeared in the era Before Christ, and the first pure gold coins were used during the reign of King Croesus of Lydia.
Throughout the centuries, old gold coins were highly used for numerous reasons, and people are still searching for them due to safety and security reasons.
You should check out reasons that will provide you perspective about why owning gold is a lucrative opportunity nowadays:
- It Comes With Significant History Of Retaining The Value
When compared with coins, paper currency, or other assets that you can find on the market, gold has maintained the price and value throughout the century.
At the same time, people see gold as the best way to preserve their wealth and pass it on to the next generation.
That is the main reason why you should consider investing in gold since you would be able to reduce the potential downfall and risks that may happen with other investments.
- Alternative To Weak Paper Money
Even though the USA dollar is one of the most valuable currencies in the market mainly due to common usage, the value of it falls due to other currencies, which is something that happened between 1998 and 2008.
That is the main reason why most investors decide to invest in gold instead of keeping unsecured money in dollars, which tends to increase the prices of gold, and reduce the value of a dollar.
For instance, the value of gold tripled between the period we have mentioned above, it reached a thousand dollars per ounce at the beginning of 2008, and that amount doubled during the next four years.
Therefore, we can say that a decline in the U.S. dollar happened due to numerous reasons, such as large trade deficits, budget, and an increase in the money supply.
- Inflation and Deflation
Historically speaking, gold was the perfect choices that will help you handle the rise since during those times the cost of living and other prices tend to increase.
In the last 50 years, you should have in mind that investors have noticed that prices of gold skyrocketed during the high inflation years and market problems.
On the other hand, deflation is a period in which prices tend to decrease, and the economy is burdened by debt and activity slows down overall.
Even though we have not seen it since the Great Depression between two world wars, the prices of gold and purchasing power of it increased rapidly, while prices dropped as a result.
By entering this particular website: https://www.wikihow.com/Buy-Gold, you will be able to find out how to purchase gold with ease.
- Geopolitical Factors
Gold tends to retain the value during the times of financial and geopolitical uncertainties, and that is a fact you should remember.
We are talking about an idea called crisis commodity since people tend to flee to places where it is safe in the case that tension starts to rise.
During those times, the gold outperforms other investments, and that is something you should remember along the way.
For instance, gold prices experienced significant movements during this particular year as the response to the E.U. crisis that happens nowadays.
Its price tends to rise as the confidence in governments goes down.
- Limited Supply and Increased Demand
Supply of gold is limited, and that is a fact you should remember. The quantity depends on sales of gold bullions that you can find in central banks.
However, the selling process slowed during 2008, and new gold declined the production since the start of a new millennium.
According to most experts in this particular fiend, annual output fell from 2500 to 2400 metric tons.
It can easily take between five and ten years so that you can create a new mine and place it in production. The general rule states that increased supply of gold tends to reduce the price and vice versa.
During the past few years, you should have in mind that increased wealth of emerging economies created the high demand for this particular commodity.
In most countries across the globe, gold is the part of the culture. For instance, India is the largest gold-consuming nation in the world, mostly for jewelry and other purposes as well.
Therefore, since the wedding season in India during October, it is the time of year when is the highest demand for it.
At the same time, demand for gold has increased among investors as well. Many of them are starting to invest in commodities, due to reason because you can invest and allocate funds base on your preferences.