Buying Gold The Logic

Buying Gold The Logic



Buying Gold - The Logic
Humans have been fascinated by gold for thousands of​ years, by the way it​ never tarnishes and by its unique color.
Sadly, gold is​ useless in​ engineering terms, except for plating electrical contacts, to​ ensure they never tarnish and lose their conductivity .​
The metal is​ too soft, with too low a​ tensile strength to​ be used for much besides necklaces and rings.
As an​ investment though, gold is​ a​ different story altogether .​
Why do people buy gold? It has zero intrinsic value.
Gold prices fall and rise, according largely to​ the degree of​ fear that people have about the future .​
When war is​ imminent gold prices soar.
When economic conditions are good, inflation low and employment rate high, gold prices fall .​
Under these conditions there are investments that are probably going to​ produce a​ better return than holding gold bars.
People buy gold because they fear the inflation and catastrophic share price collapse that normally accompanies war and political uncertainty .​
They buy gold because they think gold will hold its value.
Historically gold holds some value, whereas shares can lose all of​ their value overnight .​
However, anyone who buys gold at​ the high price associated with war will almost certainly lose money, when they sell at​ a​ lower price.
Conclusion - buy gold when everyone is​ saying to​ invest in​ the stock market .​
Sell gold when things are looking grim and there are lots of​ buyers out there.
If you do buy gold you need to​ appreciate that this investment has risk .​
The price of​ gold may fall .​
It may be years before you can sell your gold at​ a​ profit.
Until recently many countries made it​ illegal for individuals to​ hold gold bars or​ bullion .​
Individuals could buy gold coins and other items however .​
The South African Krugerrand was minted to​ exploit this opportunity and to​ earn much needed foreign exchange for that country during the years of​ economic sanctions.
Nowadays you can buy gold, silver and platinum coins in​ many denominations, including Canadian and US dollars, sterling crowns and sovereigns.




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