Why Gold is One of the Best Metals to Invest In
If you are going to decide which precious metal you are going to put in precious metals IRA, you might be tempted to look at platinum or even palladium. After all, on an ounce for ounce basis, these metals are more precious than gold. Gold can fetch more than $1,800 in the current market, but these other metals are more expensive.
It's too easy to just focus on a dollar figure and lose focus on the big picture. You have to remember that gold has a lot more to offer that its ability to keep up with inflation. It has a lot more to offer than its protection against economic calamities. The reason why platinum and other industrial metals cost more than gold is because of their industrial uses.
Gold can make a competitive showing if you strip these other metals of their industrial uses and industrial demand. Even if you strip gold with its industrial uses, gold will still come in as the best metal to invest in. Gold has so much historical value, and cultural value that it can blow away most of the other precious metals that it is compared to. Except for silver, gold is one of the best metals to invest in.
Here is a concrete and more detailed discussion as to why gold is one of the best metals to invest in on a global basis.
Gold is recognized as a currency globally
Regardless of which culture you are examining or which historical period you are exploring, chances are high that gold is considered valuable in that particular culture or political unit. That's a part of the universal appeal of gold. Cultures, people and languages all over the world can agree that gold is worth something. This is not a matter of culture, ethnicity, politics, geography or even language and religion – gold is almost across the board viewed in a very positive way in terms of economic value. This is why gold is recognized as a currency globally.
If you have a piece of gold and you want to trade it in for the local currency, you can do so in almost all countries in the world, except maybe for North Korea. Even in North Korea, gold is priced because it's a hard currency, it's not their local currency.
When a metal is reviewed as universally valuable, regardless of currency fluctuation, that metal will be worth something. This is something to think when you're looking for the best metals to invest in. Gold will always be near the top or at the top of that list.
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Shortage in supply often results in higher demand
As popular as gold is, you can always rest assured that it will always be in demand, why? There's almost always never enough supply to meet the demand. Whether a gold is required for jewelry, industrial purposes or simply for trading business, there's never enough of it to go around. At the very least, there's never enough of it to meet the demand. Because of this disconnect between supply and demand, there will always be a high price paid for gold.
Can withstand the test of time
When you look at many different historical periods of different countries and political entities, you could see that whenever there is a political crisis or economic crisis, people would sell their house and belongings, or even trade in their ready cash for gold, why? In times of economic catastrophe, regardless of where in the globe you are looking,gold will remain highly valued.
Accordingly, when people have to move from one place to the other in a hurry, they can quickly trade in their gold for cash that they need to start a new life. This is true during World War II and during the Vietnam War. Whenever people are displaced, one of the smartest moves that they can take is to convert everything they own into gold. Gold is not only easy transport, but it's also easy to convert into the local currency of the place that you are migrating to. It is the preferred currency of choice during economic and political disasters.
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Prices have increased substantially
Since the beginning of fiat currency, there has been a long period in human history where all currencies are backed up by gold. When governments do this, they essentially guarantee that their paper currency will have some sorts of value. When people have the confidence that they can trade in pieces of government-issued paper for a designated value in gold, they have more confidence in those pieces of paper.
When people use paper currency in such situations, the value of such paper currency doesn't crash while all of this went out the window with the rise of fiat currency.
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What is fiat currency?
Fiat currency is when the government says that a piece of paper has value because it says so, that's what the Latin word "fiat" means – it means "Let there be." In other words, the value is dictated by the government; value in this context is a legal fiction.
Unfortunately, after the Nixon administration in the United States, almost all governments trade in fiat currency. It is no surprise that whether you're talking about the British pound, the European euro, or the American dollar, all currencies have become devalued, why? There's no more government guarantees that the government will shell out a certain amount of gold for each piece of paper money that you hold. As a result, governments have basically been free to keep printing enough paper money to subsidize their borrowing and to subsidize their debt. This has resulted in year after year of steady erosion of currencies.
It's only a matter of time until economic reality catches up with the printing presses of the US federal reserve. This is why gold remains to be one of the best metals to invest in. Gold will always have value. When the price of the US dollars sinks compared to commodities like oil and gold, you can rest assured that your gold holdings will retain their value. Just for this reason alone, gold is one of the best metals to invest in because it's universally recognized, it's easier to trade, and it's more accessible.
Platinum and palladium are less accessible than gold. If anything, accessibility qualifies gold as one of the best metals to invest in.
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Insurance against disaster
Whenever a disaster strikes any geographic or political region, it's always a good idea to have gold available. This is one reason why gold is one of the reasons to invest in because you can easily cash out your gold and easily transport gold. It allows you an easy store of value that give you the financial resources to rise up after everything you've owned has been reduced to ashes.
For all the reasons listed above, gold remains to be one of the best metals to invest in, hands down. If you are looking for stability, if you are looking for asset appreciation, if you are looking for protection against the unknown – gold is one of the best metals to invest in.
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