The Top 10 Reasons to Own Gold
While different investors may have different reasons for owning gold, there are several reasons that are very common among gold buyers. Here we will outline the top ten reasons to own physical gold.
- Gold is a recognized store of value: Gold has been recognized as a reliable store of value and medium of exchange for thousands of years. It is unlikely that gold’s status as such will be changing anytime soon. Gold is exchanged all over the world, and an ounce of gold in Canada is the same as an ounce of gold in China. Unlike “paper” investments, gold could be exchanged for goods or services in times of crises anywhere in the world.
- Gold has no counterparty risk: Gold carries no counterparty risk and as such cannot go broke, declare bankruptcy or default on any obligation. Investors can buy gold with confidence in its reliability and value. This is in direct contrast to paper investments such as stock shares or bank certificates. Companies can go out of business or declare bankruptcy and banks can and do fail. Any type of paper investment unfortunately involves these risks whereas gold stands alone.
- Gold can be purchased and owned anonymously: The purchase of physical gold can be completed privately and anonymously. In fact, physical precious metals transactions are some of the most private financial transactions today. In a world with more and more scrutiny and more invasions into personal space, gold ownership can be maintained without the invasion of personal privacy.
- Gold may increase in value during economic or geopolitical crises: Gold has the potential for rapid and significant increases in value during times of geopolitical or economic uncertainty. Because of its long history as a store of value, investors may flock to gold during these times for its perceived safety. Needless to say, the world is currently facing many issues that have powder keg potential such as a potential Greek exit from the EU or escalating conflict between Russia and the West.
- Gold is not issues by governments: Gold’s value is not dependent upon governments or monetary and fiscal policies. Gold is, in fact, the polar opposite of fiat currency that is issued by modern governments. Fiat currencies have been shown to lose value over time while gold’s value has remained relatively stable.
- Gold investments are liquid and easy to store: Gold can be bought in fractions of an ounce and in various forms. The liquidity of the gold market as well as the ease of storing gold, even in your own home, make gold a very appealing investment vehicle.
- Currency war potential: In today’s modern economic world, countries and governments manipulate their currencies in order to boost exports or make it easier to service their debt. This can lead to dramatic declines in the value of fiat currencies and a significant erosion of purchasing power.
- Central banks and governments are buying gold: Governments and central banks are the biggest buyers and holders of gold in the world. These entities have been buying gold and keeping gold for some time now. If the largest financial powerhouses in existence are buying gold, shouldn’t you be?
- The possibility of a return to the gold standard: There seems to be more and more discussion today about a potential return to the gold standard. A return to a monetary system in which a country’s currency is directly tied to a specified amount of gold could stabilize the global currency market and level the playing field. Should such a monetary system be put into place once again, the value of gold could potentially rise dramatically.
- Gold may potentially offer protection from hyper-inflation: The modern global financial picture is one filled with sovereign debt, currency battles and quantitative easing. The slowing of the global economy has caused many central banks to increase the money supply by printing more money. This expansion of the money supply has the potential to cause a significant and sustained rise in inflation levels. Gold may potentially offset some of the losses in real returns and purchasing power that may be seen during periods of high inflation.
While this list could go on and on, these are 10 of the top reasons to own physical gold. Physical, tangible precious metals like gold can provide peace of mind that comes with no other investment.