Gold is a universal symbol of prosperity and wealth. Throughout history, people have used it as a valuable commodity. This precious metal managed to retain its value all these years, unlike other assets such as paper money and coins. One of the largest purchasers of gold is central banks and countries that hold gold reserves to secure their currencies.
The United States is one of the top countries with the largest gold reserves that amount to 8000 metric tons. As an investor, it is wise to add gold to your investment portfolio. The gold price predictions for 2020 show that the price of gold would be $1,400 per ounce and can easily reach $1700.
Analysts anticipate a long-term increase in gold prices. They believe that if you invest in this precious commodity today, revenue will be about 10.5% in 5 years. The best opportunity to invest in gold is when inflation forces down the value of the dollar. Another ideal time is when gold price predictions dictate a drop in the value of the national currency or a decline in the stock market. Be on the lookout for news about reserve banks printing out more local currency since this is also the best time to buy gold.
If you are on the fence on whether you will diversify your portfolio through gold, then here are the reasons why this yellow metal is a wise investment.
Gold Can Be a Safety Net
Savvy investors believe that gold either retains or increases its value even during times of turmoil. It has survived the 2008 financial crash with investors flocking to gold while the US dollar was still unstable.
For 2019, investment analysts consider this precious metal as a significant diversifier since the price tends to move to equities. Many believe that gold can be used as a hedge against inflation because it is not affected by the Consumer Price Index or CPI.
Liquidity refers to a market’s ability to purchase an asset at stable prices. Gold has high liquidity because of the large number of parties who are willing to buy them at premium prices. Wherever you are in the world, you can convert gold into cash.
Gold has an intrinsic value that can be passed on from generation to generation. It does not lose its worth as the years go by. Thus, liquidating it is possible at any given time.
High Demand for Gold
Gold is commonly used for jewelry and accessories, but with the advent of technology, manufacturers used it for electronics. It is also an essential part of cultures and traditions.
The strong and steady demand increases the price of this valuable metal. The market is globally renowned, and there seems to be no stopping for the growth of this industry.
Savvy investors and analysts are now seeing commodities such as gold, as a sound investment. They are now allocating funds to purchase gold as a way of diversifying their portfolio as a way of increasing wealth. Bear in mind that you should not “put all your eggs in one basket”, instead, spread your money across other investments. Just make sure that gold is one of them.