The Royal Bank of Scotland Plc's private banking division, known as Coutts & Co, is recommending that investors buy gold while they can to protect themselves against currencies that don't promise much value.
According to recent reports, analysts are noting that the low credibility of these currencies is driving people towards investing in precious metals that do not experience the same kinds of shifts in value that can diminish a portfolio's value in a very short amount of time. Stimulation efforts from Europe's central banks, as well as other central banks around the world such as the Federal Reserve, are being viewed as potential triggers for massive inflation in the future.
This means that those getting into gold now while gold prices are still much lower than many are predicting they will be could end up being is a very smart idea. Billionaire investing legends, such as John Paulson and George Soros, are showing a noted tendency towards supporting gold. This is another sign that a wide range of investors takes very seriously.
The second quarter of 2012 has shown that an economic slowdown at the global level is definitely upon us, and hearing analysts in the media advise investors to buy gold has become common. The same central banks that will be printing out more paper money to try and turn things around are investing in precious metals themselves; reports show that they will be purchasing around 500 tons this year.
Countries like South Korea and Russia have decided to buy gold, too, to help build their reserves and, as some economists speculate, potentially guard themselves against yet another global recession. As much as no one wants to think about it, it appears that statistics being released now show the global economy grinding down and a potential crisis is on the horizon which would cause big trouble for those who have primarily invested in cash.
Fortunately, the current prices of gold are still below $1,700 per ounce but are expected to rise by nearly all analysts who have been speaking out in the media recently. As more central banks gobble up gold for their holdings and billionaire investors continue to transfer their wealth into precious metals, prices will almost certainly rise due to a shrinking in supply.
That is good news for those who already hold gold, silver, and other precious metals, but for those who have not, the barrier to entry in hard assets such as precious metals will be that much higher. This is why so many financial advisers are encouraging swift action to diversify portfolios while the cost of doing so remains comparatively low against predictions of prices for the end of 2012, 2013 and beyond.
As upsetting as the prospect of inflation is for any investor to hear, preparing for the reality seems to be the only logical step to take. Many are deciding that their portfolio could use more hard assets and that stocks are not the only investments they want to be holding should world economies take a nosedive, making currencies equally risky at the same time. While no one strategy will work for all investors, diversifying in gold and silver seems to be a common sense step many can agree with.