Why Do People Buy Gold? Reasons to Buy Gold | U.S. Money Reserve

Gold has played an important role in the economy and various industries for centuries. This precious metal can easily be melted down into jewellery, bars or coins. It doesn’t rust or corrode and holds its value better than most asset classes. But why is this metal so valuable? And why is it considered a global store of value and a reliable medium of exchange? Why is there so little talk about silver having the same properties as gold? Why relegate the silver metal to a distant second place?

Gold as an asset

Do you want to buy bullion? This might be the best decision you’ll make. Gold is one of the few commodities that is in short supply but can be recycled and used over and over again. Gold can be mined, refined and made into various products. This gold remains in circulation for a long time. For instance, old or damaged gold jewellery can be melted down, refined and repurposed into something new. The supply and demand dynamics that exist for commodities like oil and wheat do not apply to gold. The gold supply can increase in the long term, even if the demand for it decreases.

History trumps supply issues

Unlike most commodities, people are drawn to gold. Empires were built and destroyed over gold. Even today, this precious metal plays an important role in political power dynamics and has helped many conflicts and wars around the world. Gold, like no other commodity, has fascinated human societies since the beginning of recorded time.

As societies developed, gold was generally accepted as a satisfactory means of payment. In short, history has given gold a power greater than any commodity on the planet, and that power has never been lost.

Gold as currency – The gold standard

Our financial system was previously based on the gold standard. Advocates of this gold standard believe that a monetary system controls the expansion of credit and enforces discipline in credit standards because the amount of credit created is tied to the physical supply of gold. However, it soon became clear that this system was not sustainable. When currencies begin to fall investors flock to assets that are known for being excellent stores of value.

Most people would think that in order to gain more is to make money is to find your way into the gold stock market. This might give you the kind of leverage you might need when all other assets are losing their value. The stock market might be bewildering for some investors. Where and how do you get into the stock market? You don’t really have to go so far. You can buy bullion products. They hold their value better than most assets and you they are always in demand. Gold bullion is very liquid so selling it for cash should be a breeze. There are other complicated factors that affect gold mining stocks. Don’t confuse yourself or make what would otherwise be too much trouble, go the simple route. With the rise in inflation and talk of impending recession, the time to buy gold bullion is now.

Why invest in gold?

Commodities generally have a higher pricing power. However, don’t wait too long to sell, especially   when you have gold. You don’t have to suffer through inflation and economic recession. This precious metal can give you peace in times of uncertainty.

By Rehan

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