Top Reasons to hold Gold and Silver
If you plan on investing your money, you should be a little knowledgeable about the longevity of your portfolio. If you are looking for a long term investment that will protect your wealth but still be able to generate some returns for you then you should look to precious metals like gold and silver.
There are some specific benefits you need to keep in your mind.
1. Preservation of wealth:
Gold and silver can be a viable alternative to holding actual cash as a fixed deposit. The price can move down, or up. The trend for gold is positive in the long time. The precious metal offers a secure option for investors with excess cash. Gold and silver may rise in value during times of high inflation and low interest rates but cash is devalued by these factors.
2. An Investment Hedge:
When inflation n is expected to rise, the value of currencies can decrease. However with commodities like gold, a rise in inflation results in an increase in the demand causing prices to increase. Currently, the global markets look to inflation expectations in the U.S and Europe to underpin the price of gold.
The value of the US dollar is also important since, the price of gold is expressed in U.S dollars. A falling US Dollar value will generally be good for the price of gold as it becomes more affordable when the dollar is weaker. It therefore becomes easier to find a low price for silver. The U.S dollar is generally a more stable currency but there may be some softness that underpins the price of gold.
Besides the strength of the U.S dollar, the interest rates also have an impact on the price of gold. When interest rates are low, precious metals like gold become more attractive. This would be an ideal time to buy gold bullion. However, when the interest rate of gold increase, investors might find other non-metal investments that yield greater returns on investment.
3. Gold as a Safe-Haven investment
For decades, investing in gold has been seen as a safe haven. Because gold is not a currency, it does not depend on economic issues and other situations that may affect any country’s currency. It has therefore improved its value especially since it is such a scarce metal available in finite quantities. For this reason, investors have used gold as an insurance policy against unknown economic threats.
4. Diversification of your investment portfolio:
Having disposable cash that you want to invest will also have to make sure that you don’t put everything in one basket. Investors need to be aware that diversification across different asset classes like bonds, shares and precious metals is desirable. By spreading your risk as an investor can be beneficial in providing safety nets especially with the price of silver being as low as it has been known to be.
5. Inheritance Security:
Buy gold bullion coins instead of commemorative coins. This makes for excellent inheritance for your family members. Buying god bullion is a safe and secure method to save for the future and ensure that there is a real chance for actual capital growth over time.
