Why You Should Buy Gold Today
People buy gold when there are uncertainties to the economy. For them, gold is a synonymous to money and wealth, even though it is not the case in the modern world. Gold has lost its place in the global economy, but that doesn’t mean that you should not buy gold today. Below is some of the reason why it is still recommended to buy gold.
Diversification of Investments
An investor need to have a small percentage of one’s portfolio in gold in order to be diversified. Some investment experts say that five percent of one’s investments should be placed in gold. However, there are some investors who think that it is far more gold that they wish to have. There are lots of people who are poorly diversified. When they look back at the time they lost money, they will notice that the reason for their lost was due to undiversified portfolio. Diversification will secure your fortune, and it is recommended to buy gold for that reason alone.
Value of Gold
Value investors know that stocks of mining companies often have deep value in the market. While stocks, in general, have a good run over the past couple of years, they are starting to find it difficult to find value. Mining stocks have lost much of their value, as the commodity boom came to an end. However, now is the right time to look for value? It is important to determine who will be the survivors, which will help you pick the winners once the cycle turns again.
And the best place to start is with gold. There are lots of reasons gold can rally. These include an unexpected increase in inflation rates, news about new financial crisis, or an international incident. Unlike other commodities that are only affected by economic activities, gold can be influenced the stability of global politics.
Price of Gold
The price of gold is near its average cost of product, and below its margin cost of production for most of its current supply. Keep in mind that you should always purchase an asset when it is below its replacement value. And at present, gold is around its cost of seasonal production.
During the boom in the price of gold, the cost of production also boomed together with the increase in prices. This was the result of the mining companies’ efforts to produce more. Unless new technology is developed or gold prices goes up, production of the precious metal will continue to fall. Price of gold will remain stable as demand remains the same and the cost of production continue to increase.
Gold is a good financial instrument. And that’s why you should buy gold when the price is right. To learn more about physical gold ownership, go to www.24kt.vip. We have all the information you need to make a smart decision about buying gold.
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