INVESTING IN GOLD

IS IT BENEFICIAL TO INVEST IN GOLD

GOLD BARS

Many experts, including the World Gold Council, advise putting between 5 and 10% of your portfolio into ‘safe heaven’ investments, and gold has classically been one of the top choices for this.

The reasoning is that, from a historical perspective, gold prices tend to move independently and often contrary to movements in the price of other assets. Therefore if the value of all your shares, property and other investments goes down, the expectation is that the price of gold will not move the same way and may well rise to offset some of your losses. Furthermore, physical gold in your possession has no counterparty risk (unlike savings stored in the account of a bank that may fail, or shares in a company that could go into liquidation), and is therefore viewed as even safer in the event of extreme economic stress. For this reason, it has been considered a ‘safe’ investment strategy to commit some of your portfolio to gold because its value may increase in the kind of economic climate that would see your other investments losing value.

This interest in gold and other precious metals is shared across the world. In Germany, for example, investors consider gold as a better investment to protect their wealth than in bank saving accounts. China has one of the longest and most detailed written histories in the modern world, and the stories it tells all include gold, silver, and even copper. Gold is symbolic of wealth and luck in China, and the giving of golden (and more recently golden-coloured) gifts has always been the hallmark of high-status people. Similarly, precious metals also have a long and hallowed history in India, but gold, in particular, is revered. The gift of a gold dowry is an essential part of most traditional Indian weddings to this day.

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