For centuries gold has been greatly prized for its unique blend of near indestructibility, beauty, rarity and because of its status as a universally accepted currency.
Gold is one of the oldest if not, the oldest asset class, it is virtually indestructible, easy to store, liquid, and unlike cash deposits gold is not subject to the risk of ever rising consumer prices, in other words gold is a good hedge against inflation. Gold's value in terms of the real goods and services that it can buy has remained remarkably stable.
A key area of growing demand is from the emerging markets including Russia, South America, India and China. Even a small increase in China's percentage of gold reserves would cause a huge increase in demand. Asia - particularly India - and the Middle East are seeing large increases in domestic jewellery demand as disposable income increases.
Physical gold should form a part of every properly diversified portfolio. It is a universal currency, held by every major central bank in the world. In some ways it pays to think of gold as as a form of financial insurance against rampant inflation and financial turmoil.
Gold offers about as much certainty as you can get and bullion, unlike other investments, will always hold a value. Gold bullion is an effective way of hedging against other investments as its value tends to be particularly buoyant when other investments such as stocks and property are under-performing.
In order to know if gold is a good investment, it is important to understand why people buy gold. In times of economic uncertainty and instability, buying gold makes more sense than other assets. With confidence in the banking system and worldwide economy at an all-time low, gold bullion could be the ultimate insurance and should act as an essential part of everybody’s investment portfolio.
With the famous yellow metal in greater demand than ever, there are many reasons why people should buy gold. Owning gold could be the ultimate way to preserve your wealth, and possibly make a healthy return in these uncertain times. It’s an age old question which people have been asking for centuries – where is my money really safe? And more and more people are now choosing the oldest answer: GOLD.
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