Future of Investing in Gold

ime and again, people ask the question, “Does investing in gold have a future?” Over the years, like every othercommodity, gold has shown a lot of volatility. When the world was hit hard by the economic recession of 2007-08, people flocked to buy gold. They were doing something humans have done for a very long time – stacking up gold in case global currencies lost their value. Throughout history, people have used gold as the “go-to” asset classduring the times of economic calamity. But, as the world is slowly and steadily recuperating from the effects of global recession, people are asking whether the gold run of gold is finally over?

Economic Recovery has Reduced Investment in Gold

Financial experts have always believed that disinterest in gold is a good thing for the economy. As we mentioned before, people buy gold when they lose confidence in the economic climate of a country. However, as the world economy has seen a steady recovery, gold has shown signs that it might not offer bumper returns to investors as they are expecting. So the important question arises – should someone invest in gold at current levels? What is the future of investing in gold? Well, first things first, no one, not even the most experienced of gold investors can tell you accurately about the course gold will take in the near future. Based on the historical prices and the state of the economy, they can provide an analysis of the prospects of gold. And if these financial experts are to be believed, you should always have around 5% of gold bullion or stocks of gold mining companies in your portfolio.

Why Investment in Gold is being Questioned?

One of the main reasons why people are questioning the idea of investing in gold is because 2013 hasn’t been a bright year for it. Gold had offered tremendous returns to investors for more than a decade (2001 – 2012), but its price has fallen this year. From the levels of $1,657 at the beginning of this year, gold has seen a fall, and is currently trading at $1,318 per ounce. S&P’s 500 index on the other hand, has offered a return of more than 15% to investors. As comparisons are inevitable, people with a bullish view on gold have begun asking whether they will be better off taking their gold investments into stock markets or forex.

Gold is an Everlasting Investment

We are of the firm belief that gold has an inherent, intrinsic value that most other asset classes lack. The world economy is shaped as much as the policies of the government as by the sentiments of people. And throughout history, people have shown the sentiment that when the going gets tough, they fall back on gold. If you are an optimist who believes that there will be no political and economic catastrophes in future, you might well be correct on staying away from gold. However, as the current Syrian crisis has proven, the world is sitting on an edge, and any potential flare-up can pit major economies of the world against each other. Therefore, as a means of security against economic crisis, and as a hedge against inflation, we advise you to keep investing in gold systematically.

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