In the first few years of the 21st century, gold was pushed aside in favor of more profitable investments. Why buy gold bullion coins when you could get rich buying real estate or technology stocks? But, in these days of economic, political, and geopolitical uncertainty, gold is once again being recognized for what it is – real, true, honest money. Although its price has more than tripled in price since 1999, this precious metal is still a worthy investment. Here are nine vital reasons why now is the best time for every investor to buy gold bullion coins.
A Safe-Haven Investment
Demand for gold by individuals and institutions increases during times of economic uncertainty and geopolitical risk. Gold bullion has long been perceived as being a superior store of value. With Iran vowing to continue its uranium enrichment program, geopolitical concerns will remain high.
Indestructible and Imperishable
Gold doesn’t rust, corrode, or tarnish. It doesn’t mildew, rot, or dissolve. You can’t shatter it, crack it, crumble it, or break it.
A Good Hedge Against Inflation
Record food and oil prices are fueling global inflation. Investors will begin to seek out assets which are perceived to be anti-inflationary. And gold bullion has historically been perceived to be a good hedge against inflation.
Insurance Against Portfolio Risk
Investors who are concerned about the downside risk to their portfolios will naturally look to invest in gold. The returns on bullion have very little correlation to assets such as bonds and equities. Thus, gold can be expected to perform well during unusual market conditions.
Protection Against Currency Risk
When the U.S. dollar falls, gold is often purchased as an alternative investment vehicle. A cheaper dollar also makes dollar-denominated commodities such as gold less expensive for investors holding other currencies. Therefore, as the fall in the dollar continues, investor demand for gold bullion will rise.
Preserves Wealth
Currently, interest rates stand at.25%, half of the official inflation rate. The Federal Reserve’s top priority at the moment is supporting the financial sector. Interest rates must remain low until the housing sector and credit markets stabilize. Negative interest rates destroy the value of money kept in bank accounts and other non-speculative investments.
Inexpensive Compared To Oil
The historical gold to oil ratio is 15.4 (1 oz of gold to 15.4 barrels of oil). Gold bullion is currently trading at it’s historical average, (based on the current price of gold at $1550 divided by the current price of oil at $100). However, when you adjust the price of gold for inflation, gold is not even close to its 1980 high. Gold would have to reach $2300 to equal the 1980 $850 high.
A Highly Liquid Asset
Gold is universally accepted around the world and can easily be bought and sold. As an investor, you therefore have the alternative to trade gold bullion for different currencies if the need should arise.
Demand Will Remain Strong
Higher inflation, rising oil prices, a declining dollar, a weakening U.S. economy, geopolitical tension abroad, and a slowdown in world economies will all play a part in the continued increase in the price of gold.
Source by Christina Goldman
9 Crucial Reasons Why You Should Buy Gold Bullion Coins Now
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