Gold as an Asset


People who understand that gold is always an asset and never a liability normally invest in gold more than they invest in any other commodity. Gold has maintained a steady price for ages with a few leaps here and there over the years to maintain its intrinsic value. Eventually the gold standards return to the economies of the world is inevitable as paper currency is being printed without control, making them valueless.

Gold and other precious metals such as silver, copper and platinum have retained their value to the once compared to money to the cent. Economies of nations who find their deficits too high normally end up printing or rather ‘making more money’ and this leads to the value of the money to depreciate. As the value of money depreciates the cost of goods rise. This leads to inflation.

As opposed to gold, governments just cannot manufacture gold. It is a natural element that has become scarce in the past 100 years more than ever. Due to the fact that they cannot ‘make gold’, what happens is gold will never lose its value. The other reason for gold to increase in value is when the population of the world increases. An increase in the population would lead to an increase in demand for gold.

This demand that super cedes the supply of gold, silver and other precious metals would inevitably drive the price of gold up. Over time gold would be deemed ‘super scarce’ and platinum and silver will take its place as the forerunner in the world of precious metals.

When you exchange cash for gold or vice versa, or when you buy gold jewelry, you will be actually securing your assets in terms of tangibility. Precious metals are valued as they are now due to the fact that governments from all over the world are stock piling gold and silver bars in the event of a global financial crisis that is due to happen every decade or two. During these times the prices of gold soar to match the prices of goods and having precious metals that can be traded for cash is an important aspect in ‘bad economies’.

Those who buy gold at the current prices will be glad they did in another 2 decades. If you save a thousand dollars and kept it for twenty years it will probably lose value and only be worth five hundred dollars at the end of the twenty years. On the other hand gold would easily be worth one thousand five hundred dollars or more.