During the first few years of the twenty-first century, investors looked upon gold as just an ancient relic. Why buy gold bullion coins when you could get rich buying real estate or technology stocks? But, in these days of economic, political, and geopolitical uncertainty, gold is once again being recognized for what it is - real, true, honest money.
Although the price of gold bullion has more than tripled in price since 1999, gold is still a worthy investment. Here are nine vital reasons why now is the best time for every investor to buy gold bullion coins.
Gold Bullion Is A Safe-Haven Investment
Demand for gold by individuals and institutions increases during times of economic uncertainty and geopolitical risk. Gold has long been perceived as being a superior store of value. With Iran vowing to continue its uranium enrichment program, geopolitical concerns will remain high.
Gold Bullion Is Indestructible and Imperishable
Gold doesn't rust, corrode, or tarnish. It doesn't mildew, rot, or dissolve. You can't shatter it, crack it, crumble it, or break it.
Gold Bullion Is A Good Hedge Against Inflation
Record food and oil prices are fueling global inflation. Investors will begin to seek out assets which are perceived to be anti-inflationary. And gold bullion has historically been perceived to be a good hedge against inflation.
Gold Bullion Provides Insurance Against Portfolio Risk
Investors who are concerned about the downside risk to their portfolios will naturally look to invest in gold. The returns on gold have very little correlation to assets such as bonds and equities. Thus, gold can be expected to perform well during unusual market conditions.
Gold Bullion Offers Protection Against Currency Risk
When the U.S. dollar falls, gold is often purchased as an alternative investment vehicle. A lower dollar also makes a dollar-priced commodity such as gold cheaper for investors holding other currencies. So as the dollar continues to fall, investor demand for gold bullion will increase.
Gold Bullion Preserves Wealth
Currently, interest rates stand at 2%, half of the official inflation rate. The Federal Reserve's main concern right now is supporting the faltering financial sector. Interest rates must remain low until the housing sector and credit markets stabilize. Negative interest rates destroy the value of money kept in bank accounts and other non-speculative investments.
Gold Bullion Is Cheap Compared To Oil
The historical gold to oil ratio is one ounce of gold to fifteen barrels of oil. Gold bullion is currently trading at a ratio of 6.48, (based on the current price of gold at $920 divided by the current price of oil at $142) close to an all time record low. For the gold to oil ratio to return to its historical mean, gold would have to trade at over $2100 an ounce.
Gold Bullion Is A Highly Liquid Asset
Gold is universally accepted around the world and can easily be bought and sold. As an investor in gold, you therefore have the alternative to trade gold bullion for different currencies if the need should arise.
Gold Bullion Demand Will Remain Strong
Higher inflation, rising oil prices, a declining dollar, a weakening U.S. economy, geopolitical tension abroad, and a slowdown in world economies will all play a part in the continued increase in the price of gold.
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