Is It A Good Time To Buy Gold Right Now?
Gold has always held been held in high esteem since the time of the Pharaohs. Its value is regarded as being second to none which is why at a time in global history, many countries operated under a monetary system known as the gold standard.
In this system, the value of a country’s paper money or currency was directly linked to the fixed value of this commodity (You can read more about the gold standard in your spare time – It’s worth reading). While this system has been abandoned and replaced in most countries by the Fiat monetary system, it is an indication of how important this precious metal was to most economies.
Currently, with the rise of cryptocurrency and Forex trading, many wonder if buying, trading, and investing in gold is still worth it. This is what this article seeks to unravel as we discuss if buying this precious metal in our modern world is a worthy investment or not.
The Place of Gold in our Modern Economy
Although it is no longer the standard for the monetary system of most of the world’s currencies, it is still very relevant in our society today. More so, it is relevant to the economy on a global scale.
To find out how true this is, one needs to only look at major financial organizations’ balance sheets like the central banks of most countries and that of the IMF (International Monetary Fund). When you do this, you’ll discover that about one-fifth of the global gold (above-ground) supply is being held by these financial organizations.
Furthermore, many central banks are presently adding to their current gold reserves. Such actions reveal the futuristic projection of the global economy. Therefore, this is an indication of the place and value of this asset in our modern economy.
Why is it Still Relevant Today?
There are several reasons why it is still relevant in the global economy which we will discuss briefly…
It preserves wealth
A good look at the current exchange rates of most of the world’s currencies will show you unstable they are. They are always in flux; going up and down. The same cannot be said of this noble-metal as it has stood the test of time. It has preserved the wealth of individuals and nations for a thousand generations.
For instance, if you held gold from 20 years ago and it was converted to its current cash value today, you would still make a profit. However, if you had converted the aurum 20 years ago to cash, you would discover that the current value of the money you had then will be lower than the modern monetary value of that same amount of money.
It is a haven
The collapse of paper currency is not a new thing in history. And with the rising political and economic tensions globally, many are becoming wary of the current global economic system.
Hence, because of the ability of gold to preserve wealth, most investors will invest in this commodity. This has been a practice that has endured throughout history and will likely continue to exist. You should visit a website that provides sufficient information on how to invest in gold to enable you made the right decision.
It is a hedge against paper currencies
When we talk about a hedge in finance, we are referring to an investment that has the potential to reduce the risk associated with the negative price change of an asset.
And since many global currencies are losing value, investment in gold which is regarded as a stable asset is being encouraged. The fact that this precious metal is traded in dollars globally means that trading in this commodity has a huge effect on the global economy where the dollar is now the most traded currency globally.
Should I Buy Gold Now?
While investing in this precious metal has a lot of benefits, it is just like any asset. Hence, a proper study of the market will help you determine when it is the best time to invest.
Buying gold is advisable:
- When there is a general negative sentiment about the asset.
- When it is inexpensive.
When you invest at such times, you are bound to make a profit when the asset returns to general favor. At that time, the price will also increase allowing you to make a profit if you choose to sell.
To help you keep track of the price of this hard asset, visit https://www.usmoneyreserve.com/blog/resources-to-track-gold-prices/. Also, pay attention to the sentiments of top organizations and top investors towards aurum. This will require a bit of research on your part, but that’s the price to pay to make a profit in this market.
While investing in gold has its pros and cons just like any investment, the pros are still in your favor provided you play your cards right.
Another way you can invest in this commodity without physically holding it is to purchase the shares from a gold mining company. The risk level is lower compared to having it in your possession.