Gold is hovering around record highs, and its investment value is steadily rising. Most of the growth in demand for gold is attributed to the skyrocketing investor call for physical gold bullion because real gold assures a richer future. But what is it about physical gold bullion that’s driving demand so strongly, and why buy gold bullion now?
Gold bullion gives you solid savings
Central banks are printing paper money as fast as they can spend it, which is not only creating astronomical liabilities but is debasing our currencies, eroding our wealth, and diminishing our purchasing power through above-target inflation. Why buy gold bullion? If you own physical gold bullion you have a traditional safety net against these paper money problems. There is no risk of your gold being used without your knowledge and your gold becomes the ultimate store of value.
Gold bullion is real money
Many people are now remembering that gold is actually the oldest form of money, used as real currency for thousands of years. Why buy gold bullion? Today, gold bullion bars and coins are still universally recognised and accepted as a currency which cannot be devalued like our modern paper money and electronic currencies.
Gold bullion is a safe haven asset during unstable times
Historically, gold bullion has proven to be a wonderful asset that increases in value during extended periods of economic, financial, and political distress. Gold is the ideal medium through which the current economic storm can be navigated. Why buy gold bullion? Gold is essentially a currency without borders – a secure asset. You can rely on it at any time, under virtually any circumstances.
Gold bullion is a hedge against inflation
Gold is renowned as a hedge against inflation. The most consistent factor determining the price of gold has been inflation: As inflation increases, so does the price of gold. Why buy gold bullion? When you save physical gold, you are protecting yourself against inflation. Owning physical gold bullion is the best financial preservation strategy against the weakening dollar. Judging by rising gold prices, many investors agree. Nervous investors are buying gold to protect themselves against the volatility of the share market and falling stock and property values. In effect, this will continue to push the price of gold up.
Gold Bullion is a hedge against a declining dollar
Gold is always quoted, bought, and sold in U.S. dollars. Any weakening in the value of the dollar causes the price of gold to increase. (See Live Gold Price for more info about gold bullion prices)
The U.S. dollar is still the world's reserve currency, which means that it is the principal medium for international transactions. The American dollar is also the currency used to calculate the value of commodities and equities, and is held as reserves by central banks worldwide. However, since the fall of the gold standard, the dollar is no longer backed by anything of tangible value. Some critics actually go as far as to say that it’s nothing more than a fancy piece of paper. With the sovereign-debt crisis in Europe, the US dollar has seen some recovery in strength, but the United States will continue to be caught in its own debt disaster for the foreseeable future. When asked why they buy gold bullion, investors say they prefer to trade-in their paper currency for real money in the form of gold bullion.
Gold bullion diversifies your portfolio
Gold bullion acts as a stabiliser for many superannuation funds and investment portfolios. Diversification helps protect your portfolio against fluctuations in the value of any one asset class. As the old adage goes: don’t keep all your eggs in the same basket! Why buy gold bullion? Gold bullion gives you the ideal opportunity for diversification because the economic forces that determine the price of gold bullion are different to the forces that influence most other investments and financial assets. In fact, the very same factors that cause other investments to suffer traditionally cause the price of gold to rise.
The time to start buying gold bullion is now
So why buy gold bullion now? Gold is likely to continue outperforming other assets for the reasons previously mentioned, and especially because of its continuing role as a currency metal and safe haven asset. The demand for gold bullion at FirstGold™ has risen consistently in the last decade, demonstrating that people are increasingly beginning to understand the significance that buying gold bullion has to their future savings.