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Invest for Future – Invest in GoldInvestment in gold has always fascinated humankind becausegold is money. This is because of its use and its demand all overthe world and its acceptance as a store for value. In contrast toother commodities, gold does not perish, tarnish or corrode, nordoes the quality of gold degrade. Buying gold coins and gold barsis the best way to invest.A hedge against inflation: Gold is known to have a hedgeagainst inflation. The most consistent factor determining the priceof gold has been inflation - as inflation goes up, the price of goldgenerally goes up along with it. Since the end of World War II, thefive years in which U.S. inflation was at its highest were 1946,1974, 1975, 1979, and 1980. During those five years, the averagereal return on stocks was 12.33% whereas the average real returnon gold was 130.4%.A hedge against a declining currency: Gold is bought andsold in currency, so if the value of currency declines, there is risein price of gold.A safe haven in times of geopolitical and financialmarket instability: Gold has been called the “crisiscommodity”. This is because it always outperforms otherinvestments during periods of political or financial instability inthe nation. Gold has raised the most when confidence ingovernment is at its lowest.Demand and Supply of Gold: The demand for gold isoutrunning the supply. The production of gold is continuouslydeclining. The demand of gold is increasing a lot in Asian
countries. There is quite an encouragement in these countries toaccumulate bullion.Store of value: Gold can never be a worthless piece of paper. Itwill always have an intrinsic value. Gold has always proved to bean effective preserver of wealth and a safe haven in times of socialand economic instability.Portfolio diversifier: Diversification of portfolio can improveoverall performance of the investment. Gold should always have aportion of the portfolio because when all the stock value goesdown, the value of gold goes up. Gold is different than other precious metals like silver, platinumand palladium because the demand for these metals arises fromits industrial applications. Gold is primarily produced foraccumulation whereas other commodities are used forconsumption.As mentioned, values of gold bullion do fluctuate but does not fallvery badly. In last five years, the value has fluctuated at a daily,weekly and monthly level but overall commodity value has goneup considerably. Starting at $900 per troy oz in Jan’2008, pricesstayed almost at the same level in Jan’09, thereafter the rise wassteep, prices went up to $1100 per troy oz in Jan’10, $1400 pertroy oz in Jan’11, close to $1700 per troy oz in Jan’12 and expectedto be at almost the same level of $1660 in Jan’13.Investment in gold always pays well. This is what history provesand hence a good reason to believe.Visit Article Base for more on this blog.
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