With the current economic situation, gold can be used as a hedge against inflation and currency value. An investor may include physical gold or gold coins to diversify his/her assets and reduce his/her portfolio risk.
You can also notice that in the previous years there has been a sharp increase in gold prices while prices of other raw materials decreased. Gold is indeed considered as a safe currency-haven in times of crisis. It is tradable worldwide because gold is durable and rare. For centuries, gold investment is an enduring proof of long-term wealth protection.
Purchasing gold can be quite complicated and intimidating when you do not know the market in depth but it is learnable and it can lead you to a straightforward sales process. One may think that purchasing gold is daunting and confusing, but you can make gold purchases and sales very simple.
Remember throughout history Gold has been convertible globally into local currency. It is therefore the world’s highest regarded and oldest currency. Investors should have some gold in good times and more in bad times.
Originally countries exchanged goods and services in exchange for gold because new supplies of gold could not be easily found. Even the founding fathers of the USA believed that having the nation’s debts backed by gold would prevent future governments spending beyond their means or worse having its assets forcibly seized or held to ransom by foreign and potentially hostile creditors.
The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. The participating countries fixed their domestic currencies in terms of certain amount of gold.
The purpose of the gold standard was to prevent expansion of inflation and to stabilize the price in the long-run. Under the gold standard, high levels of inflation are rare as the money supply can only grow at the rate that the gold supply increases (gold supply for monetary use is limited by the available gold that can be minted into coin.) The gold standard restricts the power of governments to inflate prices through excessive issuance of paper currency. It gives fixed international exchange rates between those countries that have adopted it, and eventually reduces uncertainty in international trade.
Gold is more than just a commodity since it is a store of value, a medium of exchange and a unit of account. As gold is considered to be an alternative investment option, it is important to understand its price trends and investigate about its specificities, secure shipping and storage.
Gold prices increased by almost 200 percent in five years (from year 2005 to 2010) and in 10 years, gold prices increased by almost 300 percent. Therefore, investors tend to turn to gold at times of financial turmoil.
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Other typical investment forms in the Principality of Monaco
- Venture-Capital & Business Angel investments
- Real-Estate investment
- Art investment
- Diamond investment