Gold is an asset that has been traded for thousands of years, having been used as tender long before the existence of worldwide currency, stocks, or bonds. To this day, investing in and trading gold presents plenty of opportunities for potential investors. It is, however, not without its shortcomings as we will explore in this article when answering the question ‘is gold a safe investment in 2022?’
History of Gold Investment
Since the development of global stock markets, gold has gained a reputation for having a positive correlation to inflation changes. However, its story starts long before the stock markets launched, with records indicating that gold was mined and traded as far back as 550 BC.
Despite records existing of gold trading in 550 BC, gold has been a sign of wealth for even longer than that. As far back as 4000 BC, discoveries have been made linking gold with powerful, wealthy individuals. Even though there are no official records, it’s safe to assume that gold has been traded for many millennia.
Despite this long trading history, gold did not gain the contemporary value we associate with it today until the 1800s. A number of high-profile nations developed the gold standard whereby individual currencies were fixed to the price of gold. This system was in place until fiat currencies were introduced in 1971.
Traditionally, the price of gold has remained constant with only minor fluctuations present. However, in the wake of the 2008 financial crisis, banks adopted quantitative easing (QE) which directly led to a large increase in the gold price.
Benefits of Investing in Gold
Preservation of Wealth
Gold is widely considered to be trustworthy when it comes to investment for wealth preservation. When compared with currency, owning £100 pounds worth of gold from 30 years ago would now be worth much more than the original investment. £100 cash is worth much less thanks to inflation.
Unlike when investing in currency, gold is unaffected by interest rates and cannot be created according to supply and demand. As gold is a scarce asset, it has maintained its value over time and often acts as an insurance policy during periods of economic downturn. For this reason, it is often seen as a safe haven for investors.
The price of gold often rises in relation to inflation rates alongside a depreciating dollar. This makes gold a valuable hedging asset for investors who suspect they are about to lose money and follows the idea that gold is a sensible bet when currencies like the dollar falter.
Diversify Your Portfolio
The fact that gold represents such a safe investment and does not directly correlate to stock markets makes it an excellent candidate when diversifying a portfolio. Having a balanced and well-diversified portfolio reduces risk and the impact of market volatility for investors.
How to Invest in Gold
When compared with other investment options, gold can be a relatively easy market to enter. There are multiple investment products available, and the market is generally much less volatile when compared with other commodities such as oil and gas.
A popular way for beginners and experienced investors alike to enter the gold market is through buying gold bullion. Bullion is the precious metal in a refined state that is ideal for buying and trading. You can purchase bullion in various forms including gold coins, ingots and gold bars. You can purchase these from traders such as Atkinsons Bullion.
Buying Gold Online with Atkinsons Bullion
At Atkinsons Bullion, we are fully authorised premium sellers, supplying gold and silver bullion including the finest range of gold coins and bars. Buy gold bullion securely with us and enjoy competitive prices and great customer service.
Points to Remember:
- If you want to protect yourself against financial uncertainties and take control of your own wealth, precious metals could be a sensible way to invest.
- Ensure you do your research and buy from a reputable bullion dealer at a reasonable price, making sure that the type of gold you choose to invest in correctly reflects your future goals.
- While a highly attractive investment, gold investment is not without its risks. If you are unsure, we would always suggest consulting with a financial advisor.
If you have any questions or would like to know more about buying gold and silver from Atkinsons Bullion & Coins, please call and speak to a member of our knowledgeable team on 0121 355 0620 or email us at email@example.com.
This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.