Since ancient times, gold has been associated with wealth, money and well-being for those who owned even a small part of this asset. It was one of the most sought after materials extracted from the bowels of our planet, and the human being has always seen the value given by its scarcity.
Used since the dawn of time to give value to the currency of all peoples, we Westerners had the gold standard until the beginning of the 20th century, in fact the value of the currency issued by our central banks was linked to gold, which guaranteed its value.
This system was completely abandoned in 1971, but many still consider gold a fundamental asset for their investment portfolio.
In fact, gold is considered a refuge or a safe haven, where to take refuge every time the shadows of galloping inflation returns to disturb our sleep. Especially for critics of fiat currencies, gold is an excellent investment to maintain or increase the value of one’s investments and to protect themselves from the wild printing of money created with Fiat currencies
Remember that gold is a finite resource on our planet, hardly available and in limited numbers.
Central banks in countries that didn’t have much have been buying it up in recent years.
Many countries have large quantities declared while other countries have preferred to discard them. This is a good example of the different strategy of the various central banks.
Gold is also an industrial metal used in the production of electronic parts. In reality, its industrial demand is a small part of the world total, to which must be added the demand for raw materials for the production of jewelry.
Now we should ask ourselves, is it right to invest in Gold?
Well, as in all things, there is a better time to do things, and these can only be understood by studying the set-up in detail
Having a share of capital in gold is not stupid, quite the opposite. However, this must be seen primarily as a defense tool. This does not mean that you cannot make money with gold, but as always you have to follow the trend.
If we talk about price, by convention and general rule, the price of gold grows more and more than inflation and this is not related to the trend of the stock market.
In the event of a stock market crash, there is usually a rush to grab gold, and then sell the gold when the stock market rises vigorously
However, Gold has a volatile price and not a fixed price. The period and time of purchase must always be considered and what tools we are monitoring.
In fact, there are more methods and tools to be invested in gold.
The main differentiation is between physical gold and financial gold.
Financial gold is the gold that we can buy through financial instruments such as ETFs and ETCs, futures or derivatives. In this case we will not physically have gold in our hands but we will have financial contracts that represent the amount of gold we own that we will be able to trade on the main world markets. Obviously in this case the choice must be careful with regard to the instrument and all its peculiarities, relying on issuing companies that are more than reliable.
Physical gold, on the other hand, is the gold that we can take home and touch with our hands. Generally it is not just about jewelry, but also coins or bars, which can range from a few grams to a kilogram. The unit of measurement of gold is the ounce compared to the US dollar. This gold can be kept in your home, obviously safe from buglar or scammers. Given the high value of the metal, if you decide to buy more than a few ounces, it makes sense to contact specialized custodians to keep our investment safe.
In fact, there are real risks to owning it, not just financially, but personally. Gold is not an investment for everyone.
Another way to be part of this market is to expose yourself by buying shares in mining companies. This is another method which, however, is totally financial and which must be considered and studied like any financial investment, to which the risk of the sector in which these companies operate must be added.