Blogging On Finance

During times of crisis and higher-than-average inflation, gold’s price rises, making it attractive to investors looking for assets that can survive economically challenging times. Contrary to this, cash and several other asset classes lose value over time because of inflation. Moreover, gold is also more liquid than real estate and retirement accounts. Despite this, the reality of investing in gold is more complex than it may appear at first glance.   Is Gold A Good Investment? Gold has the benefit of preserving wealth. Gold has been a valuable resource used by multiple civilizations and empires for thousands of years. Many of those civilizations devised currencies that today only have historical significance. On the other hand, gold still has monetary value and can easily be bought and sold. When considering if gold is a good investment, we can compare the performance of gold with that of the S&P 500 to determine gold’s investment merits. The S&P 500 has performed signif...

Many people invest in gold in response to a climate of uncertainty. Here are the top four reasons to invest in gold:   1. Gold as a Hedge Against the U.S. Dollar The notion that gold preserves wealth is of even greater importance in an economic environment in which investors are confronted with a declining dollar and inflation that is on the rise. Gold has traditionally served as a hedge against both of these situations.  Gold is priced in U.S. dollars worldwide, benefiting from the dollar’s depreciation. The reasons for this are twofold. First, gold buyers (such as central banks) must sell their U.S. dollars to complete the transaction. Ultimately, this results in a decrease in the value of the U.S. dollar. Second, a weakening dollar makes gold more affordable for investors holding currencies other than the dollar. The result is increased demand from investors holding currencies that have appreciated relative to the U.S. dollar.   2. Gold as a Hedge Against Inflation Due...