Gold can be a great investment asset to have as part of a balanced portfolio. Let's analyze why invest in gold.
1.Stable investment
Buying gold and silver is a long-term investment, from which you should not expect a quick and large profit, but which stabilizes the investment portfolio, ensuring the safety and purchasing power of capital.
2.Gold as a store of value
Gold is often used as a safe store of value during times of economic turmoil and to profit from monetary easing by central banks. Cuts in interest rates reduce bond yields and raise investor concerns about rising inflation. It lowers the value of other assets and makes the precious metal more attractive to buy.
3.Rising price of gold
Analysts expect the precious metal to rise in price to new highs in the next year and a half due to the actions of central banks and the desire of investors to hedge against risks. They believe that gold prices could surpass $ 2K an ounce in 2021. Growth prospects for the global economy remain uncertain, and the world's largest central banks have cut interest rates. This has increased investor demand for safe haven assets, primarily gold. In the medium term, gold prices will continue to rise to new all-time highs. The current rates and the Fed's monetary policy are the main factors behind the optimistic outlook for the gold market and will support it in the medium term. Increased demand for gold makes the dollar stronger. The strengthening dollar makes gold more expensive for buyers with other currencies, and also sharply reduces the demand for metal and jewelry in countries like India and China, where quarantine measures are in force and many consumers are losing income. The rise in gold prices may continue even if the economy rebounds quickly from the economic crisis caused by the coronavirus pandemic. As the economy recovers, demand will shift from buying a safe-haven asset due to fears of the economic impact of COVID-19.
How to invest with gold?
It makes sense for a private investor to include precious metals in the portfolio even now, when they are at historically high levels. But it is better to increase the share gradually, acquiring assets on corrections. When choosing a method of investing in financial instruments that directly depend on the quotes of precious metals, you can divide investments between the shares of gold mining companies and ETFs, in which the underlying asset is metals. This diversifies the portfolio and makes it possible to receive dividends from stocks.
What market segments generate demand?
- jewelry making;
- consumption of gold and silver in industry;
- investment demand for gold;
- state gold and foreign exchange reserves.
Do you have any investment experience? Share your opinion in the comments below! If you wanna learn more or know more you can contact my team or you can jump into a one-on-one call with me right now clicking one of the the below buttons.
16.99$ Well spent - How to Invest in Gold and Silver: A Complete Guide with a Focus on Mining Stocks
He uses to dedicate part of his life to inspire others and help them achieve the most out of their lives. Since he was 20, he had successfully founded and managed several companies operating in the field of management consulting, wealth management and fintech. He is Member of Institute of Directors in London, Member of Changer Club in Riga, Member of Fintech Association of Hong Kong, Member of Singapore Fintech Association, Member of Non Executive Director Association in London and Member of Alumni Network of Draper University in San Francisco. He loves travelling, he is a cigars lover, an amateur golfer and a dapper man.
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