There has been some excitement lately about gold investing as the value of gold has steadily risen. However, less than 3 percent of Americans actually have stock in it. A little over a decade ago, a single gold coin cost $300, but to buy one today costs about $1400. This is excellent news for people who invested ten years ago, but is gold a good investment now? Mainly due to inflation, it is expected that the price of gold will only continue to rise, and its reliability and liquidity makes buying gold now a great idea for the savvy investor.
How Does Inflation Affect the Value of Gold?
Inflation occurs when the government continues to print money it doesn’t have in order to cover deficits. The more money that is printed, the less the dollar will be worth. Last year, the US government printed $1.6 trillion more than it had, bringing inflation up 1.7 percent with no end in sight. As the value of the US dollar continues to lower, the value of gold in proportion will only continue to rise which means that gold investing over the long term will only become more and more lucrative.
Why is Investing in Gold Better than Investing Elsewhere?
One of the best things about gold investing is that it tends to be very stable in value. This is because it is reliably in demand due to the use of gold in products such as jewelry and electronics. Gold is a good investment because it has great liquidity – that is to say that it can easily be sold for cash. In fact, next to cash itself, gold is the easiest asset to liquidize whenever it is needed. Gold is a universal commodity, and this means that anywhere in the world that a person is, there is never a shortage of demand. You can buy gold coins or invest in a gold backed IRA and see the advantages of gold either way.
So is gold a good investment for the average person? The answer is yes. The value of gold has been rising steadily for many years and continues to do so with each passing year as inflation takes hold. The universality of gold cannot be beaten by any other type of investment and it can be easily converted into cash whenever the time is right.