FX.co ★ 5 reasons to invest in gold

5 reasons to invest in gold

Experienced market participants say that traders should better invest in gold. Experts propose distributing shares in a personal investment portfolio so that it contains gold. There are at least five reasons for long-term investments in this precious metal

5 reasons to invest in gold

Third party risks

Economists have repeatedly claimed that fiat money is not backed by anything other than a country’s public debt. If a debtor fails to fulfill its obligations (including bankruptcies of companies, banks, or separate countries), money vanishes for good. Any investors keeping their assets in the current monetary system are constantly at risk of losing their capital. As for gold, it carries minimal risks, experts say. Holding assets in precious metals (gold coins or bars) protects investors from third party risks.

5 reasons to invest in gold

Devaluation of paper money

Since the 1970s, central banks have been printing enormous amounts of cash. Analysts notice that the running currency printing machine almost never stops. Some governments use additional funds to wage wars, keep costly campaign promises, subsidize unprofitable economic sectors, bail out banks, and tackle crises. All this leads to currency depreciation, while the price of gold actively grows at this time. As a result, fiat money is devalued. Notably, popular precious metals such as gold and silver retain their purchasing power for decades. According to the results of a survey, demand for gold has peaked over the last three years.

5 reasons to invest in gold

Debt crisis risks

Experts reckon that the existing debt-based paper money system has shaky grounds. In fact, low interest rates and the official inflation rate cannot improve the situation. It is believed that a combination of factors such as effects of compounding interest and a sharp increase in private and public debt will crash the financial system. Yet, gold is safe from such risks. By investing in precious metals, investors can protect their assets at the time of a crisis.

5 reasons to invest in gold

Current monetary policy of central banks

These days, world’s leading regulators pursue a zero interest-rate policy and encourage a gradual expropriation of depositors. Notably, bank clients lose part of their deposit funds due to negative interest rates. In cases like that the importance of gold is difficult to overestimate. Keeping your assets in precious metals can guarantee you a long-term profit.

5 reasons to invest in gold

Portability of gold bullions

Gold’s biggest advantage is its high portability. The size of gold bullions is small enough, and they are easy to store. Interestingly, a €10K worth gold bar fits into a matchbox. The precious metal is easy to transport in case of a financial crisis. Analysts consider gold a liquid asset and a universal form of payment in any country. Long-term investments in gold are the most reliable.

Go to the articles list Open trading account