Why Buy Gold in Times of Crisis
Gold jewelry: a precious investment We have already talked about how a gold jewel is perceived by those who buy it and those who receive it as something precious. Nothing more true! There is no better purchase that can be made, especially in times of economic instability. Illustrious economists maintain that investing in gold is still a more than valid option: despite market fluctuations, it responds well in times of crisis and continues to be a solid reserve of value over time. In this article we will try to understand together the reasons that make gold the safe haven par excellence!
What is causing market instability?
We live in a world where the global geopolitical situation has a decisive influence on the market trend. We come from a particularly turbulent 2017 in which the election of Donald Trump as President of the United States and the nuclear threats of North Korean President Kim Jong-un have destabilized and not a little the global economic structures, provoking in response from the central banks a progressive increase in interest rates. This instability has continued also in 2018, a year in which hypotheses of a trade war were also made, in which the conditions of the exit of the United Kingdom from the EU are being defined. All this does nothing but increase the pitfalls for the price of gold , very susceptible to fluctuations in the global market. Despite this, consumers continue to buy gold jewelry and even those who go to invest in safe haven assets are led to buy coins and ingots that they keep in special vaults.
It is a common belief among economists that owning a portion of one's capital in gold is the wisest choice to make .
Why continue to invest in gold?
First of all, there are no infinite reserves because, as with all metals, it is extracted from the reserves present in the earth's crust, therefore in a few millennia the reserves are destined to run out. This means that its value , net of fluctuations, is destined to increase over time also by virtue of the fact that demand continues to increase: emerging countries in particular require it significantly, contributing to a constant growth in its value. Gold is a metal that resists the action of atmospheric agents, it does not change, it remains over time. In short, gold is as it appears. This undoubtedly conveys the security of a long-lasting investment , but above all transparent ; shares, stocks, real estate and the like are all things closely linked to the market, gold instead travels in a circuit of its own although, as already underlined, it is also affected by economic and political changes. However, its preciousness remains tangible. It seems strange but when citizens' trust in politics, specifically national and international governments, reaches historic lows, it is at that moment that the price of gold increases with an inverse proportionality ratio. A type of direct proportionality has always linked the price of gold and inflation . That is, when the cost of living increased, so did the price of the most precious metal. Recently, however, following the latest economic strategies of the Fed, it seems that the situation is changing. All that remains is to observe the evolution of the situation because at this time it is too early to say whether this circumstance will change things. The fact remains that historically when things go badly, even in the most extreme case of catastrophes, gold remains the preferred safe haven even as a currency of exchange. The most recent example in history is the Bretton Woods Agreements where gold was used to give new life to the currency market.
Trust an expert In conclusion, despite the fluctuation of its price, gold is the only safe haven together with diamonds to maintain a safe value over time. The worst that can happen is to realize less on a part of the invested capital if you resell it at a lower price than when you bought it, however, you just need to rely on an expert to overcome the inconvenience. At Ferro Gioielli you will find qualified professionals in the safe haven sector. Come and visit us to understand what the daily gold price is, if the period is favorable and buy your gold with peace of mind.
