There are over 187.2k tons of gold in the world. Since the beginning of civilization, people have been mining it for jewelry, trinkets, and other accessories and adornments. Today, gold doesn't just make a great decoration - it also makes for a great investment.
Here, we're going to make the case for gold as a long-term investment. Read on to learn how this precious metal can diversify your portfolio and protect your other assets against inflation.
The Case for Gold
When people think of materials that are worth a lot of money, gold is usually one of the first things that comes to mind. It's a rare metal and can sell for a lot of cash. It's also useful in a wide range of industries, including automotive applications, consumer electronics, household items, medicine, cosmetics, and dentistry.
Gold is also beautiful and unique because of its distinct hue and shine. This makes it a coveted material for making jewelry and other accessories.
Gold has high demand while being scarce. This makes it a good investment that can sell for a lot of money. It has a high value.
Sometimes, gold can be worth over $2000 per ounce. It's currently only worth slightly less than that, though the future of gold's worth looks promising.
Gold as a Hedge
Investments like stocks and bonds are extremely volatile, especially during geopolitical conflicts. Global markets tank and fluctuate when global powers are at war. The Russia-Ukraine war brought the value of several company's stocks down, and the Israel-Palestine situation likely will do so as well.
As tensions in the Middle East rise, gold is a safe asset to invest in and hold onto.
Geopolitical conflicts naturally cause economic insecurity. Both individuals and organizations don't know how much inflation will happen. Tariffs, embargoes, boycotts, import fees, and tanking stock markets can cause a lot of stress.
To remain secure, people look to own things that bring them wealth. Gold is a popular option for those looking to hold onto something valuable, so demand for it rises.
Investors who buy gold at the beginning of geopolitical conflicts, such as current Middle Eastern tensions, can sell it at a high profit later.
Tangible Asset Status
Part of the reason that gold is such a safe investment is that it's tangible.
Tangible assets are those that have physical substance. You can see them and touch them. They exist in the real world beyond just as a simple concept.
As such, they hold intrinsic value.
Stocks are an extremely common investment, but they're not tangible. They only have value because the business selling the stocks assigned them worth. The value of the stock is only as high as the value of the business, and this can fluctuate dramatically in various economic climates.
If the business goes bankrupt, the stock won't be worth anything. This isn't true of gold (or other precious metals).
It's true that some coins have numismatic value, or value that's assigned to them as a currency. For example, a quarter has a numismatic value of 25¢.
However, it also is made up of nickel and copper, which have inherent value when melted down. Even in cases of extreme inflation, these melted-down materials would have utility in several industries. The quarter would be worth something.
Gold as a Tangible Asset
The materials that make up a quarter aren't worth much, but gold coins can be. As we said before, gold can reach over $2000 per ounce.
Since some rare gold coins are an ounce on their own, you can make a lot of money by investing in gold as a tangible asset. Britannia Coins are one of the best options, but you may also invest in Kangaroo coins, Inaugural Obverse King Charles III coins, or Canada Maple Leaf coins.
The possibilities are limitless!
Serious investors might also save money by purchasing sets of multiple proof coins. These are in mint condition and come with a box. They're highly coveted by collectors and accumulate value over time.
Buying them today could pay off a lot in the future. An upfront $14.7k investment could pay off by tens of thousands of dollars as people seek safe assets in a politically volatile world. You'll be able to sell them at a high profit later.
Some coins don't have any numismatic value. These coins are called "junk coins," but they're far from junk. Their metal content has the same intrinsic value as coins that do have government-assigned fiat value.
Gold junk coins exist alongside silver ones. You can usually buy them at a low price because they don't have a high percentage of precious metals in them. They make a great bulk purchase, and you might luck out with coins that have high gold content.
These coins, also called rounds, can make you a lot of money in the long term. People looking to use the gold for custom jewelry or manufacturing parts can buy it, melt it down, and use it for several applications. You can turn a handsome profit in the right market.
Other Benefits of Investing in Gold
In addition to frequently paying off, gold is an asset that effectively diversifies investor portfolios. Diversification means that you invest in multiple different types of securities as a means of mitigating risk. If your stocks and bonds go bust, you can fall back on a precious metal investment to make sure that you don't lose all your money.
This is especially important since gold has a negative correlation with the stock market. They move in opposite directions of each other. Gold's value increases as the stock market deteriorates and causes economic uncertainty.
Gold is ideal for diversification because it acts as a hedge against inflation. Their value rises against that of the dollar. Central banks even hold onto big reserves of gold bullion because it protects them against dollar fluctuations!
People from all walks of life do this on an individual level, too. During high inflation periods, when the numismatic value of coins decreases, gold bullion retains its intrinsic value. Inflation doesn't impact it, so buyers maintain their financial security.
This is good news for you since you won't need to rely on the government and business institutions to keep you afloat. It's also great for those looking to sell gold later since you can turn a higher profit from those looking for a hedge.
A Global Asset
Fiat currency only has value within its own jurisdiction. American investors looking to make purchases in Europe need to convert dollars to euros. This means paying potentially hefty exchange fees, transaction fees, and/or conversion fees.
Gold is universally recognized as something that has value. It's not assigned to the metal by a government or banking institution. There's also worldwide demand for these assets, so you can trade in gold abroad without encountering issues.
Easy Conversion to Cash
It's also easy to convert your gold to cash whenever you need to. There are shops all across the nation (and the world) that are ready to buy gold at a fair price. You'll get quick access to funds when you're in an emergency situation.
You also will have an easy time finding online buyers. There's always demand for gold because supply will always be limited.
Plus, you'll know you're getting a fair rate because of the market's transparency. News sources and exchange websites will always be ready to give you the most recent information available about gold.
How to Maximize Long-Term Returns
After purchasing gold coins or bullion, it's important to stay informed about the precious metals market. After all, you need to sell at the right time in order to make the most money possible.
Monitor market trends online and analyze inflation trends. Consider the historical impact of geopolitical events on investments like yours. Make sure you're constantly in the loop with updated price movements.
You want to sell your gold when the demand for it is high. This means that you should think about selling when it peaks or when inflation is at its worst. People will be looking to buy gold to protect themselves in a financial pinch.
You'll get more money for it at this time!
To avoid floundering about whether it's the right time to sell, determine what price you want to get in advance. That way, you'll have a pre-determined price that you can expect. You won't always be waiting for it to increase and then experience the disappointment of a massive dip in the market.
This is a surefire way to reduce the risk of your assets not paying off.
Get a Good Gold Price Today
Now that you know the case for gold as a solid investment, it's time to begin searching for precious metals. The United States Gold Bureau is committed to helping you diversify your portfolio, hedge against inflation, and generate long-term returns.
We offer precious metals including gold coins and bullion. Contact our team to learn more about what we have to offer and start investing ASAP.