Why invest in gold?
With countries across the world experiencing periods of political upheaval, social unrest and conflict, there is no mistaking the fact that gold is a safe haven for investors. With prices soaring to record highs in 2019, there’s never been a better time to invest in gold.
A global currency
Gold has been a form of currency and mode of storing wealth for centuries thanks to its scarcity. Historians often herald the precious metal as being responsible for the banking industry meaning its intrinsic value goes back centuries. This is no 21 st Century cryptocurrency – it is a measure of wealth almost as old as time.
With countries all over the globe holding a percentage of their overall wealth in gold in order to protect themselves and their economy from financial risk, gold is seen as one of the steadiest forms of investment. We’re increasingly seeing this, as nations from Russia to China slowly transition their reserves from the volatile US dollar to the stable gold bullion.
Assets for the future
Gold is by far the best performing asset of the 21 st century, yielding an average return of 15% over the past decade alone.
Q1 and Q2 2019 were a tale of major gains for gold with investors – it smashed through the $1400 mark as markets dipped and peaked. We’ve seen global banks and private investors increasing their stocks and taking advantage of what could be the lowest prices we’ll see for the immediate future. In all cases it’s clear, gold ensures financial security for the future.
Five reasons to invest in gold
1. It’s a safe haven asset
With market uncertainty surrounding world economies growing due to political and financial issues, the price of many commonly held assets has received a big hit. We have trade wars, Brexit and other geopolitical crises to thank – turmoil that has made gold more stable and more desirable than ever as elsewhere, markets experience huge amounts of volatility.
Gold has always been recognised as a safe, tangible asset and has proven to be a reliable investment option for thousands of years. Today more than ever, a growing number of investors and central banks are once again choosing to secure their wealth against financial risk by investing in gold. The modern investor able to move quickly is also seeing the value of their asset trending upwards giving security and real returns.
2. Interest and savings
Current savings performance is severely limited by low-interest rates and the capital amount a bank or financial institution is required to hold at any time. This puts savers in a precarious situation, with several UK financial institutions being added to UK government watch lists as customer finances face escalating risk for very little return.
With Brexit just around the corner, inflation is set to rise to as much as 5% while interest rates pay as little as 1%. Against this backdrop, investment in gold and other precious metals is on the up.
3. Property and inflation
With inflation levels almost certain to increase by 4-5% in the short term, investing in property is a risky business. Traditionally a pension plan and safe investment, we could see property becoming less attractive as a long term safe haven for wealth. If inflation does soar, mortgages will become financially unachievable for many, resulting in an oversupply of
property and a fall in value. For those with large property portfolios, a huge amount of money could be wiped from the portfolio’s worth almost overnight. Gold, of course, poses none of this risk.
4. Bonds and the risk game
Some bonds offer a seemingly good investment opportunity, but many of the bonds that promise the best yields often come with the greatest risks. A key example of this is the exceptional Greek bonds paying up to 9%. It may sound like a great deal nut anyone with an insight into the market will understand that this comes with a very high risk. For the more risk-averse, gold is the antithesis of this shaky investment proposition. Stable, solid, secure.
4. Tax-free gold
Income, property, equity and savings are all taxed, but gold offers a tax-free solution to keeping hold of all of your gains.
Physical gold is a legitimate exception to the tax rule, similar to an ISA, but without the restrictions. This means you are able to keep greater control of your investment without being subjected to penalties on early liquidation.
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