As concerns over COVID-19 continue to plague markets, investors are turning to one of the world’s oldest currencies. During the last couple of years investors have endured a couple of ups and down triggered by things from the collapse of the banking system to political upheavals, trade wars, virus pandemics, threats of wars and actual armed conflict. The world’s oldest commodity, gold continued to rise. And due to lock downs many investors are looking to buy gold online. Gold bullion dealers are noticing this trend and are quick to innovate and update online systems for purchasing.
The gold price rose over $2,000 an ounce outperforming all major asset classes in the first half of 2020. According to the World Gold Council, in 2020 alone the price of gold rose by 27%. This happened at the height of the pandemic proving once more that gold is still a safe investment.
When the price of gold bullion goes up, it’s a sign that investors are considering the fact that the upcoming economy would be bleak. Gold prices continued to reach hit record highs as global markets continued to recover from the effects of the Great Recession and Europe grappled with the eurozone debt crisis.
The price of gold is still uncertain because of the latest economic crisis. It has been boosted by the Russian invasion of the Ukraine.
But not all retail investors should buy gold bullion as a safe haven against economic uncertainty. There are several things to consider when deciding whether to invest in gold. When the US dollar falls, the price of gold rises. This has been happening for decades.
Another thing that affects the price of gold: If the value of the US dollar weakens, gold will strengthen. Gold has an inverse relationship to the US dollar. With the recent sell-off in the US dollar, the demand for gold is still higher. The inverse relationship has existed since the gold standard was abolished.
You shouldn’t put all your money in gold: unlike stocks that have dividends, gold doesn’t have the growth potential of stocks or provide income.
Historically, physical gold has been very difficult to sell due to the shipping, insurance and storage costs incurred by investors. However, gold is not the only hedge against market turbulence. To protect themselves from stock market fluctuations, some investors should look for assets that don’t mirror the movements of the stock market—so that when the market goes down, at least some in your portfolio will improve to offset the losses.
In the past, bonds were the only way to diversify an investment portfolio. Due to the low interest that can be obtained from bonds and the possibility of an increase in the interest rate, which will reduce the value of bonds, it is necessary to use another type of asset for diversification.
Precious metals such as gold and silver are not correlated with stock and bond prices. This makes gold the perfect diversification tool.
Other investments that don’t traditionally follow stock movements include real estate — although commercial real estate has suffered particularly during the coronavirus-related shutdowns.
When looking for investment opportunities to and to buy gold online it’s important to know who you are dealing with. Calling through and speaking to a real person at a real shop is important to build trust. Only deal with dealers who have the latest websites and real shops to trade out of.
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