Why Invest in Gold and the Many Ways to Invest in Gold

By: CoinsBullions

There are many major factors that make gold a great investment right now. 

Why Invest in Gold?

1. When a Bear market is close
It is now 2018. The last recession was almost 10 years ago in 2009. Gold hit a lowest point on 12 Nov 2008 at 712.30USD/oz to its highest on 6 Sep 2011 at 1,869 USD/oz. Since then, Gold is hovering around 1300 USD/oz (April 2018).

Gold has a tendency to do well in extreme bear markets. But since, no one can predict exactly when is the next bear market, investing in gold after a long bull market makes alot of sense. Now is a good time to invest in gold if you are prepared to wait 2 to 3 years to cash out. Most experts believe, a recession will definitely greet us within the next 2 to 3 years. 

2. Gold is an excellent hedge against inflation and deflation.
Gold stock will also rise during times of inflation and deflation. Investing in gold is good inflation protection. Gold rises as the value of the dollar falls. As the government lowers interest rates significantly and wildly prints money (creating inflation) to offset that deflation which leads to substantially higher gold prices. This is where we are now, and gold has done what it's supposed to do.

Historically, gold has tended to do the opposite of stocks.

  • It skyrocketed in the 1970s, when stocks did horribly.
  • In the 1980s and 1990s, when stocks soared, gold lost over half its value. Now in the new millennium gold has soared while stocks are still below their year 2000 highs I consider these to be the best opportunity right now.

3. Geopolitical Uncertainty
When there is geopolitical uncertainty such as threats of war, trade-war, gold prices will increase. 

Apart from Gold, silver has also more than doubled in value from 1932 to 1936 during the Great Depression (the price of gold was fixed by the government). The next long bear market was 1968-1980. Silver rose from around $2 in 1968 to a peak near $50 in 1980.

4. How to Invest in Gold?
You can do either one of the followings;

  • Buy Gold Coins or Gold Bullions
    Common gold coins are known as 'bullion' coins. These include popular coins like Krugerrands or Canadian Maple Leafs, and they cost just a few dollars more than the current price of gold. These don't have extraordinary upside or downside, they simply move with the price of gold.
  • Invest in Gold ETF like SPDR.
    It has net assets worth $36 billion with a yield of 12.8% in 2017. 
  • Trade Leveraged Gold ETFs
    If you are a savy investor, you can trade leverage Gold ETFs like Nugt and Dust. Both NUGT and DUST are leveraged ETFs that tracks the GDX. They try to simulate GDX by amplifying its gains and losses. By trading Nugt and Dust, you can make a nice sum of money.

More information on Gold Investing can be found below under Everything about Gold Investing. Good Luck. 

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