While it may not be entirely suitable for everyone, there is no doubt that gold is a unique and potentially lucrative investment that remains enduringly popular. It remains one of the few assets that can be traded either physically or on paper, but it is the status of gold as an actual measure of wealth that earmarks the commodity as a unique haven during every economic austerity.
Its consistent historical performance also offers solace to investors and is extremely unusual in an increasingly volatile financial market. Since the days of early monarchies, gold has been the primary mode of investment, until recently, when stocks took over that role. Still, experts recommend having 10-15% of investment in gold.
So why does gold present itself as such an essential asset to hold onto?
Why is Gold such a Lucrative and unusual Investment Options?
As a consistent asset class, gold is also relatively predictable. The current market underlines this fact, as a strong dollar and the prospect of rising interest rates continues to weigh down gold prices at present.
According to the Wall Street Journal, the Gold for December delivery (which just so happens to be the most actively traded contract of this type) ended 0.7% down earlier in New York, suddenly trading at the reduced price of $1,224.80 per ounce.
The price of gold had temporarily rebounded after the Federal Reserve initially motioned to hold interest rates at their current level, but now this has passed the commodity has begun to sink once again.
While the fact that the price of gold tends to decline during times of economic growth may discourage some investors, the predictable nature of this physical asset at least enables traders to create a carefully honed strategy.
So long as you are able to use breaking and real-time news resources while forecasting future economic trends, gold can provide a safe store for your wealth and long-term gains.
The increased flexibility and fluidity of gold has also increased its appeal in 2015, as people look to trade paper gold through exchanged funds (ETFs) that negate the burden of ownership.
The option of investing in gold through an ETF has encouraged many newcomers to enter this market, and there are numerous benefits of this practice. In addition to alleviating the burden of ownership, it also removes many of the typical barriers to entry that surround the gold and precious metal market.
These include access (due to the inflated price of gold), transaction costs and the challenges posed by storing and shipping this asset. This option is particularly suitable for newcomers, whether these novices are new to trading or simply inexperienced when investing in precious metals.
The Last Word
Above all else, the unique nature of gold and similar precious metals means that it offers crucial variation to your trading portfolio. While stocks, shares, and alternative commodities are often directly linked and fluctuate according to changes in the economic climate, gold opposes these trends and remains contrary in its nature.
So while the value of your stocks may plummet when the economy contracts, you can rely on the safe haven that is gold to retain its value and provide a safety net for your capital.