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Tuesday, October 12, 2021

5 Reasons why Gold is a Good Investment

Gold is respected throughout the world for its value and rich history, which has been interwoven into cultures for thousands of years. Coins containing gold appeared around 800 B.C.E, and the first pure gold coins were struck during the rein of King Croesus of Lydia about 300 years later. You may wonder is gold a good investment for long term? Let’s see what to decide about buying gold now.

Is gold a good investment right now

Let’s discuss on different points –

Hedge Against Inflation

When inflation rises, the value of currency goes down. Over the long term, almost all major currencies have depreciated in value relative to gold. Therefore, people tend to hold money in the form of gold. In times when inflation remains high, especially when it is in high double digits, over a longer period in the economy, gold becomes a hedge against inflationary conditions.

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Related article: Is gold still a good investment?

Tangible Asset

Gold is one of the few assets that is tangible, and thus, it creates a perception of safety among investors. Purchasing gold with bullionboxsubscriptions.com is the efficient way to invest in precious metals as they bring the highest quality metals with options for monthly subscriptions. Also, while assets stored digitally are prone to hacking and other misuse, gold is free from such concerns.

Portfolio Diversification

Some economists believe that gold is a highly effective portfolio diversifier due to its low to negative correlation with all other major asset classes. Still, as a rule, gold shows no statistically significant correlation with mainstream asset classes.

Provides Liquidity

At the time of need, investments in gold is a faster liquidation process than other physical assets like real estate. Unlike many other assets there is no lock-in period in gold investments except for sovereign gold bonds. The redemption amount in the case of physical gold will, however, depend on the purity of the gold, denomination, and other factors including the market price.

Geo Political Factors

Gold usually does well during geopolitical turmoil and the current crisis. Crises such as wars, which have a negative impact on prices of most asset classes, have a positive impact on gold prices since the demand for gold goes up as a safe haven for parking funds.

Gold should be an important part of a diversified investment portfolio. This is due to the flexibility of its price in response to critical events, like stocks and bonds, to decline. Although the price of gold can be volatile in the short term, it has always maintained its value over the long term. Hope you got the answer to the question “is gold a good investment today?”.

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Aurora Chowdhury
Aurora Chowdhury is a Business Psychology Graduate from Kingston University, London. She has expertise in domains like Business Psychology, Management, Strategic Management, and Business Strategy. She has a growth mindset and strongly believes in perseverance. She regularly writes for various websites and also conducts counselling sessions.

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