Investing in Gold – The Key Considerations


    There are many ways you can invest in gold as a budding investor. You can buy stock in gold mines, physical gold bullion, or ETFs (exchange – traded funds).

    Gold is an asset that has many unique characteristics and qualities, making an investor’s portfolio extremely attractive and diverse. Investors are often encouraged to invest in gold as part of a long-term investment to diversify their portfolio.

    Having a hedge against inflation, gold has extremely valuable qualities and sees you through an economic crisis. As with any investment, there are risks associated with investing in gold, for example, storing your gold, and losing your gold.

    Gold as a Hedge Against Inflation

    Gold is very important in the world of investing and in today’s economy. The popularity of gold grew profoundly following the 2019 Covid pandemic. Gold has preserved wealth for many, more so than any other form of investment.

    The value of gold has grown so profoundly over the years one ounce of gold back in the 1970s is now worth around 650% more than it was back then.

    Gold has a major hedge against inflation. Believe it or not, gold appreciates as inflation rates rise. You find that investors jump to gold when they see their cash is losing value.

    As gold retains its value, it’s generally safer to invest money in gold and sell when they make their money back. As gold is priced in the US, it generally performs better when the U.S dollar drops.  Investors who are buying gold must sell their U.S. dollars to make the payment.

    This results in the U.S. dollar lowering in value as global investors seek to diversify out of the dollar. The lower value dollar makes gold less expensive for investors who hold other currencies. Therefore, demand is higher from investors who hold a variety of currencies that have grown relative to the U.S. dollar.

    The Last Word

    Whether there is political or economic uncertainty, investors look at gold as their ‘safe haven’.

    Investors who hold gold are able to preserve their wealth in times of economic uncertainty. Whenever global events suggest we are approaching a time of global economic uncertainty, investors will often buy gold as a safe haven.

    This trend is unlikely to change any time soon, making gold and similar precious metals increasingly popular among investors across the globe. For more information on investing in gold, see Sharps Pixley.


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