Is Gold A Good Investment At These Lower Prices?

Gold has been the most popular precious metal to invest in for many years, but is it still worth the investment today? There is no denying the decline of gold on the market today, but that doesn’t necessarily mean that gold is not a good investment.

Gold has been used for currency throughout history of mankind, being consistently revered for its value and rich history across many different cultures.  Gold has been synonymous with wealth and power since the reign of King Croesus of Lydia in 500 B.C., often recognized as the first time pure gold coins were used as currency.

Throughout history gold has been known for holding its value, especially when compared to paper currency.  While the price of gold has been known to take short term falls, over time gold has always been shown to maintain its value long term, actually thriving during economic crisis.

An astonishing statistic is the fact that gold has been historically shown to survive both inflation and deflation in the economy.  Unsurprisingly to most, gold has served as a hedge against inflation.  In fact, in the United States, the 5 years that saw the biggest rates of inflation were 1946, 1974, 1975, 1979 and 1980, and these years actually saw tremendous gains for gold.  Upwards of 130% when compared to the average real return, which at the time was -12% on the Dow Jones Industrial Average.  Those numbers show that inflation has absolutely no adverse affects on gold as an investment.  Probably a bit more surprising, gold is preserving purchasing power during deflationary periods. During the worst economic crisis the United States has ever seen, the Great Depression in the 1930s, the purchasing power of gold ascended drastically while other prices plummeted.  This might be attributed to the fact that gold is such a universal currency.

Furthermore, people often rely on gold during times of geopolitical uncertainty.  Remember the Great Depression was also the same time as World War 2.  Gold has often been referred to as the “crisis commodity” because it is known to perform so well under such uncertain times.

The demand for gold has risen drastically in the past decade.  Many investors are seeing gold as a commodity which funds should be allocated.  With the sudden influx in demand for gold, many companies have turned to buying personal gold in exchange for money.  This can be a very lucrative option for someone looking to sell gold, but you need to be wary of which company you entrust with your precious metals.  There have been numerous reports of fraudulent activity amongst these companies, so you want to make sure you are working with a reputable company with a proven track record of doing good business if this is the route you want to go down.

The fact is that gold has always proven to be a wise investment for anyone that wants a diversified portfolio.  Gold has historically been shown to withstand the toughest economic crisis this world has seen, and has always been considered one of the most sought after precious metals in the world.  There is a lot of demand for physical gold right now, and I believe you will start to see the price of gold rise as a result.  Right now gold prices are around $1200/ounce, which is a pretty steep drop from the almost $1800/ounce it was earlier this year.  Gold has always had a history of having these dips, but it is the one investment that over time has remained very constant.  Investors may be focusing on stocks and bonds at the moment, but rest assured, they will be focusing again their investments on gold to capitalize on the low prices.

Author Bio – Stephanie Halloway is an expert in precious metals, with a particular passion for gold.  Her experience working with gold buyers has led to some very interesting findings as she continues to pursue her passion for everything that shimmers! 

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