Is Gold a good investment?

With former popular investments like stocks, cryptos and rental properties producing increasingly poor returns, and high levels of inflation devaluing money in the bank, many investors have begun to ask where their money is safe. Interest in gold investments is growing, but new investors might find themselves asking is gold a good investment? Below we’ll discuss why gold is a good investment, and where to start.

Gold has long been considered a smart asset to invest in. As both a hedge against inflation and a way to diversify your portfolio, the benefits of gold investment should be considered by anyone looking for a simple, safe way to protect and grow their money.

Why invest in gold?

With a huge range of investment options out there, why invest in gold? Gold has been a highly valued precious metal for most of human history. From the Egyptians, to the first Roman gold coins, right through to the current day; humans continue to have a fascination with the dense, yellow metal.

One of golds key strengths is its isolation from the trends of other markets. Historically, when the global economy has been in crisis, gold has remained strong (and even made significant gains). For example, the price of gold increased rapidly following the financial crisis in 2008/09 and remained high even as economies began to recover. In particular, gold typically makes gains during periods of rising inflation; as investors see that their money is losing value, they look to safer assets like gold that has proven its ability to maintain its value.

Unlike fiat money, which can be printed by banks as part of a quantitative easing program, gold is a limited resource. Increased demand from emerging markets, and gold’s use in the technology industry, mean that when coupled with the finite nature of the metal, the price of gold can always remain strong.

is gold a good investment

Owning physical gold is the ultimate way to control your investment. There is no third-party risk, and you can decide where, and for how long, to store your gold before you sell, whether you take possession or choose to use a secure storage service.

When you do decide to sell, this can be done quickly and simply using online dealers, or selling to the large private market.

Is it worth investing in gold?

Gold as an investment relies on an increase in value to make returns, rather than the annual yield you might see from stocks and shares or a property. For gold to reach its true potential it can take time, which is why gold is seen as a long-term investment. Gold has shown excellent performance since the 1970s, with a price per ounce that has steadily trended upwards, making it well worth investing in gold.

For a savvy investor, profits can be realised in relatively short periods of time. Awareness of gold’s performance, coupled with a reasonable knowledge of current affairs, can give investors the ability to spot prime opportunities of when to buy or sell their gold. At the BullionByPost news section we report on geopolitical and financial events that could have an impact on the gold market, helping our customers stay informed.

Ultimately though, gold is seen as a good long-term investment, protecting your money over the years. It offers strong potential returns, at low risk, and is the perfect way to diversify your portfolio and spread your exposure to any losses.

Is gold a good investment in 2022?

With gold reaching record highs in 2020 some investors have asked us whether gold is a good investment in 2022. Gold is still near it's record highs, propelled up in Spring following the invasion of Ukraine by Russia. The shock conflict has reminded the world that peace is not a guarantee even in the modern era, and geopolitical issues that have been bubbling to the surface for many years could still threaten to turn into further conflict.

From an economic point of view, the sanctions placed on Russia threaten the global economy, just a year after emerging from the pandemic. Recession is now once more on the cards for many countries, all while inflation continues to drive price ever higher and cause a cost-of-living crisis.

Rising interest rates have stopped gold from climbing to new all-time highs, but the economic backdrop would certainly suggest plenty of opportunity for gold to push higher still. Read our full 2022 gold price forecast for more detail on why gold could be a good investment in 2022.

Investing in gold coins

Investment gold can take various forms; jewellery, bullion, ETFs or even investing in mining companies. All are ways to put your money into gold, but investing in gold coins is always a popular option.

Investing in gold coins can offer various tax benefits depending on the country in question. The beautiful designs are often coveted by collector who may be willing to offer additional value when selling. Investing in gold coins offers a sure return based on the spot price, but could therefore also go up more in value for a collectable coin. They are small units which are easy to store, but also fun to hold and view.

Investing in gold bars

Another popular alternative to gold coins however is gold bars. The relatively simpler designs, and larger unit size, means that bars will typically have a lower premium than coins which can make investing in gold bars one of the most cost-efficient ways to invest in gold. For large investors in particular, gold bars tends to be one of the first choices.

Should I invest in gold?

One of the most common questions we get asked is 'Should I invest in gold?' As with any investment, the decision on where to put your money should be made only after careful consideration of the facts. At BullionByPost we recommend that up to 10% of your liquid wealth is kept in gold. Diversifying your portfolio reduces overall risks against the volatility in any market, and by investing in gold you can protect yourself against the wider economic fluctuations and uncertainties that many other assets are weakened by.

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