Piece of Gold

Several reasons exist to consider investing at least a portion of your investment dollars in gold. Let’s look closer at the benefits of investing in gold, especially in the gold coin IRA.

Gold Holds Its Value

People tend to think of gold as a robust way to preserve their wealth from one generation to another. Unlike paper currency, gold is a precious metal that doesn’t corrode and is easily made into a coin. Also, the United States dollar hasn’t always been a stable currency. Gold tends to hold its value. For example, the cost of gold increased to a height of up to $1900 per ounce in 2012. US reserve currencies declined on and off throughout the last twenty years due to trade deficits and an increase in the supply of currency available. A trade deficit occurs when a country’s imports exceed the number of its exports.

Gold Investments Remain an Inflation Hedge

Historically, gold remains used for an inflationary hedge. Its prices tend to increase in conjunction with a cost of living increase. Currency tends to lose its power to buy items during an inflationary period. Gold’s price also rises with inflation. Also, when people believe their money is losing value, they like to rely on gold because it seems to feel more stable than paper and other types of a country’s currency.

Gold: Protection from Deflation

When prices increase, but business activity slows down, a deflationary financial period may be occurring. This fact remains true, especially when a country’s economy has excessive debt. Thankfully, the last major issue with deflation occurred in the 1930s during the Great Depression. Another deflationary period happened during the 2008 financial crisis in some parts of the world. During these two periods, individuals chose to hoard cash by saving significant amounts of gold and gold coins.

Political Uncertainty Influences Gold Worth and Prices

Politics have a great deal of influence on:
  • Financial certainty.
  • The value of a currency in a country.
  • The value of gold.
Many people regard gold investing as the “crisis commodity.” This feeling gets reflected in many investors’ choices to invest in gold during times of world tension. Gold investments typically outperform many other types of purchases and investments during times of turmoil between countries. Recently gold prices increased in relation to the crises in the European Union. So, gold prices tend to rise when the confidence in major governments remains low.

Gold Demand Increasing

Emerging market economies have recently increased in wealth and their demand for gold for investment purposes. Investing in gold is meshed with the culture of some of these countries, such as India. October is Indian wedding season, and gold prices increase in that country during that month. Individuals in China traditionally invest their wealth in gold bars. Investing in gold has become the norm for many other investors from around the world, making purchasing gold a great way to diversify any portfolio. Many diversified investors prefer to add gold to their stock investments to be financially diversified.

For additional suggestions on adding gold to your portfolio, please contact us at https://goldco.com/gold-ira/ira-approved-gold/. We'll help you diversify your portfolio and make smart investments in gold.