Gold is an ancient metal known for its attractive colour, and hence it is valued for its beauty. People who own this precious metal are regarded wealthy. Its ever-increasing demand has made it a favourable investment option. Women use gold to ornament themselves on special occasions. Gold is not merely used in jewellery, but also in so many industrial products like computers, spacecrafts, mobile sets, biological instruments, dentistry etc. The economy of any country depends on its gold reserves.
Gold is a popular investing option for many investors. Throughout history, people are investing in gold, as it gives them a sense of security. Gold Standard was a monetary system where countries made a commitment to fix their currencies in terms of gold. It was a standard system a long time ago, though this system has been abolished, but still gold is used in international trade between countries, and describes how strong the economy of a country is.
During 20th century, for some period, the gold prices were not stable, and we had seen gold struggling in the international market, but since last few decades, there has been a permanent increase in the demand, and price of gold. The reason behind the increase in demand of gold is that investors have lost confidence in paper money, and started investing in gold to protect them from inflation.
Historically, the US dollar, and the British pound have gone up in value in certain times, and down in others. Even though the British Pound has risen considerably in the past few years, it is not as universally traded as the dollar, and may not be the best investment option. Thus, gold provides an answer to this problem. An increase in the demand for gold makes the gold prices rise.
History is evident that gold has never lost its value, and remained stable. Central banks and European countries control paper money. These institutions can create inflationary pressure any time by printing as much currency as they would like. With more money in the market, the inflation increases, and the worth of savings, and investments decrease.
It is no wonder then that people, as well as countries, are actively looking towards gold as an investment. Gold prices also rise when there is a drop in the value of the dollar. Moreover, it is also inversely linked with the performance of the stock market. When the stock market index falls, gold seems to rise in value.
You may be seeing many talk shows on TV channels, and articles on internet about what people think about the price hike of gold. For some people, it is a positive change as investors are investing in gold, and this will improve the economy. For some pessimists, it is not a good change; they associate the jump in prices with the failing efforts of State to curb inflation.
To build a healthy portfolio, the investors should take on the advice of experts. The current trend will not be going to stop, and in the coming future, the price of gold is so likely to increase.