Since its discovery in 2600 BC by the ancient Mesopotamians, gold has ruled the world as a trading currency. Whether in coins, jewelry, or only as its naturally presenting nuggets, this precious metal has been humanity’s preferred choice of money.
While some sayings such as “good as gold” revere it, and other metaphors like the biblical golden calf condemn it, one thing is for sure – gold has left its impact on our history like no other element. Sure, diamonds might be a girl’s best friend, but it is gold that keeps the globe spinning. Click on this link for a more comprehensive account: https://www.ancient.eu/gold/
From the early days of the search for El Dorado, to the Gold Rush that practically built California we know today, this gem has kept us chasing after it for centuries. Its purity, denoted with the proportion of 24 karats, has been used to compare to many human qualities and personal characteristics.
Although we have come far since the days of searching for golden cities and mines with unlimited supplies of this precious metal, its firm hold on our economy remains. Our grandparents had the right idea of gifting golden jewelry instead of money and advising us to keep our savings in gold bars. You probably thought they were senile or paranoid, but they were righter than you think!
Stay with us as we delve deeper into the impact of gold on our economy today and why it is smart to decide to invest in it. You would be surprised to learn that not all is as it might seem, and the power this element held over our ancestors is still in place over us.
Gold and the economy
Unsurprisingly, even modern humans retained their forefathers’ tendency to compare every worthwhile thing to gold. That is how the so-called “Gold Standard” was developed. With this, the value of a country’s monetary currency depended on this precious metal’s importance. They would set a fixed price for it and then determine the currency’s value in relation to that price.
However, this standard of evaluating currencies is no longer in place in any country in the world. Most developed countries did away with it in the 1930s after the Great Depression devastated their economies. It was actually because of this economic crisis that major Western countries abandoned the gold standard. The fixed price their currencies were being valued against was too restrictive to boost their economies.
Nevertheless, using the golden standard could be beneficial for the economy! Namely, having a stable price to value your currency against can prevent inflation – the decrease in currency buying power. The limited supply of this element means that human beings can’t artificially manipulate this purchasing power by printing more money.
Unfortunately, or fortunately, depending on your opinion, that measure of control has gone along with the golden standard. These days, the price of gold is inversely related to the value of the dollar. This means that with the rise of the dollar’s buying power, the price for this precious metal drops.
Despite this, many still consider this gem a “safe haven” for wealth protection, especially during economic recessions, political instability, and general times of crisis. Being that we are currently in a pandemic that is sure to leave a lot of people without their jobs and many businesses in a crunch, it seems like the perfect time to invest in some bars.
Why invest in gold
Your first and foremost reassurance that investing in this precious metal is a smart choice is the banks. Central banks today hold as much as one-fifth of the entire above-ground gold reserve on Earth. A lot of this has been added in recent years, which should tell you exactly what they think about the global economy’s long-term stability.
Another is just simple math. Let’s say that 50 years ago, you had an ounce of this element in your possession, which at the time would be valued at around 40 dollars. Whether you decided to keep it or sell it, at the end of the day, you would still have the same value in money at the time. However, today you could buy much more than a pair of sneakers with its value if you decided to keep it. The dollar might have lost on purchasing power, but this element has not!
But let’s leave the currencies aside. The same can’t be said for other commodities either. Just take a look at what happened to oil, one of the most valued commodities on the market, after the coronavirus pandemic hit and lockdowns forced everyone to stay inside. Without the need to drive, oil was practically useless, and producing companies were forced to pay themselves to get rid of their excess.
On the other hand, gold supply and demand do not rely on so many external factors. It retains its value whether you are going to the office or watching TV on your couch at home. After all, it is no coincidence that its price rose steeply in 2020 when almost all other commodities and currencies suffered.
By now, you have probably realized the benefits of investing in this precious metal. And trust us, you would not be the first one. But getting convinced is the easy part; the problematic step comes when deciding who to invest with.
Choosing a trustworthy gold investment company is an important decision. Depending on your investing method, you need to know that you and your portfolio are protected as a consumer. One such respectable company with outstanding reviews on this website is Regal Assets. Whether you are investing in your retirement fund or only looking for a safety net, they will give you the best advice.
Always keep your best financial decisions in mind and try to think ahead. As much as we believe we have many years ahead of us, the future often arrives too fast. That is why it is vital to invest in it as soon as possible not to catch us off-guard.