Precious metals like Gold and Silver have been coveted by humankind for thousands of years. These metals have been used over the centuries as a means of trading for goods and services. And also for the preservation of wealth. Gold is one of the oldest known forms of currency ever used. And there have been coins discovered that date back as far as 800 BC. Because the inherent value that holds Gold was previously utilized by governments and central banks worldwide to maintain investor confidence in paper money, this was known as the gold standard, and it allowed those who held paper money to convert it to Gold easily, and for a fixed price.
The gold standard was abandoned in 1933, and nowadays, we have a fiat paper currency, which is issued by central banks and national banks. When paper money loses its value, whether as a result of inflation, stock market crashes, or recession, investors will harness the power of precious metals to protect their assets from the downturn in the economy; when this happens, it pushes the value of precious metals, Gold in particular, higher when the economy starts to tank.
Is now a good time to invest in Gold? Many market analysts seem to think that it is. And given the fact that Gold has consistently produced excellent for terms, especially over the last few years, it is hard to disagree with them. Currently, an ounce of Gold cost $1,735. So it begs the question, would now be the time to make an investment in Gold? The answer would be definitely yes; the price of Gold is dropping at the moment.
So now is the time to buy and get more bang for your buck. Gold has performed exceptionally well over the past few years, and it is genuinely an excellent asset to invest in. And it is widely expected that its performance will begin to pick up very soon. In recent times, there has been much uncertainty around the global economy, and many factors have contributed to this, from the ongoing trade war between the USA and China to unrest in the Middle East and new governments being elected around the globe and not to mention the pandemic. To try and mitigate the results of this uncertainty, central banks have been setting interest rates at record lows.
This has prompted a gold rush amongst investors. If this drop in interest rates continues, then many people will begin to realize just how important it is to invest in Gold as a part of a balanced portfolio.
The bullish outlook does suggest that there is an excellent potential for high returns in the near future. Given that the price of Gold reached an all-time record high of $2067 per ounce in August 2020, one could ask the question, when is the best time to buy? The CEO of the Singapore Bullion Market Association, Albert Chung, has a different outlook. He thinks the question should be how much, rather than when? There is no good time to buy Gold said, Chung. Every investor should have Gold in their portfolio. As a general rule, financial advisors would recommend that gold assets should make up 1% to 5% of an individual’s portfolio. Chung is of the opinion that this could go even higher, rising from 5% to 15%.
The truth is that most people who hold Gold and their portfolio only hold a small proportion. But if they were to increase that amount by even as little as 1% or 2%, it could have a significant bearing on their outlook.