Why is it Good to Invest in Gold?

If you're thinking about buying some gold as an investment, you may be making one of the best financial choices a person can make. Both gold and silver are hot commodities right now, and gold will most likely continue to be hot for a long time to come. Demand for gold varies daily and changes with the seasons. It's been on this earth long before any companies or the stock market were. So there was a demand for gold before most countries today were even established. Although there may be lots of fluctuations when it comes to gold prices, I believe there will be a continued demand for gold as long as humans exist. In fact, I'll even go as far as to say that I think gold prices will keep continuing to rise, with the exception of some temporary dips and drops occasionally, and bullion will continue to increase in value over the long term. There's many reasons why I say this, and I think many investors would agree with me when I say that gold is one of the safest investments out there for long-term traders. I personally ignore all the constant price changes mentioned on finance websites and the news, because I see too many reasons why gold will endure over stocks and continue to be in demand for many years to come.

Less Volatile Than Stocks
While gold prices fluctuate on a daily basis and go through all-time highs and sometimes even major lows, they aren't quite as volatile as stocks on the stock market are. When the stock market crashes, people can lose everything if they are heavily invested in one stock. Historically, gold has never had a drop so severe to where people lost everything. There have been a few drops where the price of gold was cut in half in a matter of days or weeks, but this has always corrected itself eventually. In 1850, the price of gold was around $18.50 per ounce. Since then it's continued to rise over the years, with a few dips and drops here and there. In recent years, it's become one of the best ways to make quick profits, since the price has doubled. From January 2009 to November 2010, the price of gold skyrocketed from $800 per ounce to $1400 per ounce. So when it comes to the basics of gold, it often has these really hot times where it becomes very popular and there's a lot of demand. Then it may calm down for a few years and drop in a price a little, but it always seems to recover and bounce back and become hot again after that.

Safer in Economic Downturn
When the economy is suffering and stocks and other investment types may be doing bad, gold usually does good. This is because people invest in this shiny commodity when they fear the local currency, such as the U.S. Dollar, will depreciate in value. Gold is universal, meaning it holds a certain value in just about every country in the world. When the U.S. economy is not doing so good, the dollar weakens against currencies in other countries that are still doing good. This isn't the case with gold, because it does not represent a certain country the way currencies do. So when one country is doing bad, the gold in that country is usually not negatively affected since the citizens there may stock up on gold, in light of their doubts about their own currency.

Can Trade in Anywhere
As mentioned before, gold is a valued commodity in all the major countries of the world. Because of this, you can hold on to it and trade it anywhere you go and it will maintain value as long as the prices stay strong. There are many places in the world where certain types of currency need to be converted into the local currency before vendors and store owners will accept them. This isn't the case with gold bullion, as most people who do business understand and respect it's universal value. The same can be said about gold coins or pretty much anything made of gold. If you own a solid gold coin, you will find a buyer for it no matter where you are on earth, as long as your selling price is somewhat close to the current market price.

Only So Much Left
Another major benefit of buying and investing in gold is that there is only so much left on earth. It's not like money, in that it can't be reproduced with printing machines. As mentioned before, it's universally accepted. This means that no matter what economies fail, gold will always hold some type of value since it's limited and not man-made. It's a natural resource, like oil, and there's only so much of it out there to be discovered before it's all gone. Because of this, the value will most certainly always rise over the long-term. While it may drop in value every now and then, this is most likely only temporary because of it's universal demand and how it's a limited resource.





comments powered by Disqus