People who are wanting to purchase gold bullion or those who collect gold coins or gold bars, often wonder what benefits purchasing gold brings.
Today, we are here to talk about the main factor that makes gold worth a purchase.
Stable Commodity
Gold has been in the news for all the right reasons. Its prices have been fluctuating very rapidly and it even hit new highs in the last few months.
While fluctuations are common, gold is still among the most stable commodities, especially when compared to stocks. Similarly, it's also more stable than currencies or Forex.
If you take a look back at historical figures, you will realize that the purchasing power of gold hasn't reduced. If you bought 1 ounce of gold 10 years ago, it will give you more money in terms of dollars but if you had 100 dollars 10 years ago, it will not buy you the same amount of gold.
This change can be seen in the consumer price index as well. The product that cost around 20 dollars in the 18th century, was found to cost around $200 in 2005.
The stable past of the gold provides a look into what will probably be a stable future even 200 years from now. Inflation and recession may bring a drastic change in paper currency, but it is safe to say that gold is an incredibly stable commodity and is bound to retain its purchasing power. This is the greatest benefit of purchasing gold.
What Type of Gold Should I Purchase?
There are four main options to choose from:
- Gold Stocks
- Exchange Traded Funds (ETFs)
- Futures
- Bullion
Each of the first three types has downsides. For stocks, they can go through a crash. Futures are unstable and can change out of nowhere while ETFs, although considered to be based on actual stocks, can still go through major fluctuations.
Bullion is the only stable option. Gold bars and coins retain their value since they are not simply a "representation" of gold.
In the case of a stock downturn or an economic recession, gold coins and bars do not lose their purchasing power and remain valuable.
Conclusion
Stability and ease are two reasons why gold is considered the top investment by many. Consider this option if you?re interested in securing your future.