Investors can invest in a variety of ways. Some of these include buying stock in gold miners, exchange-traded funds (ETFs), associated companies, and buying physical products. Investors usually have many reasons for investing in gold. However, there are different sides to whether it is worth it to invest in gold. The first side of the argument is that gold has ceased to hold the monetary value it did in the past and is, in the modern days, just a barbaric relic. They add that in the economic environment of the modern-day, paper currency is the money of choice. On the other hand, the contrasting argument is that gold is an asset that possesses numerous intrinsic qualities making it unique and essential for investors to hold their assortments.
A brief history of gold
Gold has been used for various uses with people who, for example, possess pure gold jewelry, having a sense of prestige with their possession. Sites such as ReviewsBird reviews some reputable sites that one can find gold products. With items made of gold being highly valued, it is crucial to understand the history of gold. The gold market is estimated to have arisen in 2000 BC when people in ancient Egypt started creating Jewelry. Gold would later begin functioning as a currency at about 560 BC when merchants desired creating an easily transferable and standardized type of money that would streamline trade. The designing of a gold coin imprinted with a seal appeared to be the answer as Jewelry made of gold was already recognized and accepted widely in various areas. Following this new advent of gold as money, its importance grew through the UK and Europe, with remnants from Roman and Greek empires being displayed conspicuously in museums worldwide. Gold would, with time, symbolize wealth throughout Asia, Europe, the Americas, and Africa.
The Bimetallic Standard in the US
In 1792, the US government would continue with the gold tradition by forming the bimetallic standard. This standard stated that each monetary unit in America had to be backed by either silver or gold. One US dollar was, for example, equivalent to 24.75 grains of gold.
Gold in contemporary economies
Though today gold no longer backs the US dollar, it still has great importance in the modern economy. The extent to which gold is essential can be assessed by looking at central banks’ balance sheets and other financial organizations such as the international monetary Fund. These organizations are responsible for almost holding a fifth of the world’s total gold supply. More so, various central banks have added to their extant gold reserves, showing concerns about the long-term global economy.
Gold is a method of preserving wealth.
Gold has continued to hold great importance in the modern world because it has preserved wealth successfully throughout many generations. This is different from paper-dominated currencies. The example below helps get the perspective. One ounce of gold in the 1970s was equal to $35. If one had a choice either to keep the $35 or to hold an ounce of gold, the two were equal in value and bought a similar amount of things such as a fancy bicycle and a brand new business. If today one has an ounce of gold and converted it to today’s prices, it still would be enough to buy a brand new suit, but for the $35, this cannot be said. Thus one would have lost quite a significant amount of wealth by holding the $35 compared to the ounce of gold. The ounce of gold has had its value increase, while factors such as inflation have eroded the dollar’s value.
Gold is a safe haven.
Whether it is factors such as tensions in Africa, the Middle East, or anywhere else in the world, it is gradually becoming clear that economic and political uncertainty is a reality that the modern economic environments are grappling with. For example, this is why investors typically view gold as a safe haven during these instances of economic and political uncertainty. This has been the case throughout history. In times of political coups, collapse of currencies, and empires, investors who have held on to gold have successfully protected their wealth and, in some instances, used it as a commodity of escaping the turmoil’s.
In conclusion, each investment has its disadvantages and advantages. If you don’t prefer holding physical gold, you can buy shares in a gold company, which might be a safer alternative. If you believe that gold would be the safest bet against inflation, investing in coins, bullion, or visiting a site such as Sunshine Jewelry to have some jewelry are paths that one can take to start their gold investment prosperity.