Why Investing In Gold Could Protect Your Wealth During Financial Uncertainty

Gold is the kind of safe investment that people turn to in times of financial uncertainty or trouble. Historically, gold has been a currency, or the standard of measurement for currency, over thousands of years. So is it a sensible choice as an investment today?

The pros

Gold no longer backs world currencies, but it’s undeniably a physical asset with a value attached. It is often viewed as a ‘safe’ commodity, and a safeguard against inflation – this could be especially true if there were another major financial world crisis. Gold can be a solid investment, at times when inflation is high enough to mean other investments aren’t keeping their value. It also has high liquidity – meaning the value is easily available. Also, gold will always be popular in certain countries thanks to cultural traditions, such as in India.

The cons

If you choose to buy gold then you have the expense of storing and insuring it, as well as paying any transaction fees when you buy it. From a financial standpoint, the price of gold can suffer when interest rates are higher – meaning your gold investment might drop in value.

ETFs

ETFs or gold exchange-traded funds can be a way around the problems of direct ownership. It’s a type of fund that owns the assets (in this case, the gold) and divides ownership of the assets into shares. While this means you can’t directly access the gold, on a day-to-day level it’s much more practical.

Should I invest?

While the price might vary, gold’s very nature means it will always hold value, and in the situation of a financial crisis its value is obvious. You could always of course buy some gold jewellery – with the advantage that you can wear it!