There are Many Reasons for Owning Gold

Prudent & Long-term Planning - Gold is the ultimate store of value

Gold is a preserver of wealth, maintaining its value over the long-term. This is in sharp contrast to a country's currency, which is subject to inflation, having its value constantly eroded away. Ever wondered why goods are more expensive today than yesteryear? That's why. Financial studies, such as Harmston (1998) and Jastram (1977), agree that gold consistently maintains its value and acts as an effective preserver of wealth, despite price fluctuations. Everyone should save a bit of gold, using it as the anchor of one's requirements and savings plans.

Gold as an investment

Gold over the last 5 years has outperformed the stock market and been one of the leading investment assets. This is why it's been a major part of investors' portfolios and why many leading fund managers stress the importance of owning gold. Furthermore, many commodity and currency analysts believe that gold could reach record-breaking highs in the coming years, as oil and other commodities have.

Gold is the universal global currency

Gold has always been accepted around the world since before the times of the Egyptians to the present day. Furthermore the gold market is a deep and liquid one. It is this that makes gold a truly liquid global currency, tradable around the world.

Gold as a safe haven

Gold is one of few financial assets that is not matched by a liability or debt, whose value is not dependent on the performance of governments or corporations. In unsettled times, it becomes a safe haven. Recent examples of this safe haven status can be seen during the stock market crash of 1987, the 2001 terrorist attacks in New York, and the first quarter of 2002 with Japanese investors buying gold, as they awaited the withdrawal of government guarantees on bank deposits. In an uncertain world, it pays to hold gold.

Gold as a hedge

A country's currency can be printed endlessly leading to inflation and reduced value. Gold cannot be. The gold supply is limited to the amount refined per year, and so is not subject to the same inflationary pressures. Consequently, in times of inflation or falling currency values, gold acts as the ultimate hedge for the markets.

Gold is virtually indestructible

Gold cannot be destroyed, neither by fire, nor by maltreatment, nor by wars. It is this property that allows gold to be stored, saved and used as a form of currency in times of financial instability, with the confidence it affords.

Gold is widely used in modern industry

Gold has not only a monetary side but is also used in a variety of industries such as dental, jewellery, avionics and electronics to name but a few. These industries always need gold, providing a minimum stable level of demand.

To learn more about the fundamental and technical reasons for investing in gold, please click here.