The weakness of the dollar and inflation are some of the factors that are likely to drive precious metal prices, he said. Gold is the metal we'll turn to when other forms of currency don't work, which means that gold will always have value in difficult and good times. Unlike paper money, coins or other assets, gold has maintained its value over the centuries. People view gold as a way to transmit and preserve their wealth from one generation to the next.
Since ancient times, people have valued the unique properties of the precious metal. Gold does not corrode and can melt on a common flame, making it easy to work with and seal it as currency. In addition, gold has a unique and beautiful color, unlike other elements. Gold atoms are heavier and electrons move faster, which creates the absorption of some light; a process that had to decipher Einstein's theory of relativity.
Today, the United States Government and its Federal Reserve System print money almost ad hoc, have signed huge rescue packages for their citizens, have kept interest rates at just under 1%, and currency degradation is also taking place. They are not the only ones doing it in any way, but for global economic purposes, what “matters” most is the United States. Then there is the deterioration of the relationship between the United States. UU.
and China, the upcoming US presidential elections, the unprecedented slowdown in most of the world's economies and the uncertainty about the future caused by the global health pandemic. We need it for too many things, for it to lose its luster as a raw material and as an investment. In fact, retirement funds often offer eligible members the option of investing in gold through ETFs and other managed funds. Gold ETFs have also seen consecutive days of outflows, making it clear that some investors are cashing in on their gold and are withdrawing.
Gold can stimulate a subjective personal experience, but it can also be objectified if adopted as an exchange system. These funds wield enormous investment power and, if everyone is looking for gold at the same time, that will greatly affect the market. Most would agree that gold has always had value, for all these reasons, as a component of decorative jewelry, a currency at one time and as an investment. While some gold-plating methods have existed since approximately 600 BC.
C., modern science has perfected the process and its main use is for gold-plated jewelry. This is because people chose to accumulate cash, and the safest place to store it was in gold and gold coins at the time. Throughout history, gold coins and coins with a high gold component have always been associated with the highest monetary denominations and were often reserved for high-value trading. Gold should be an important part of a diversified investment portfolio because its price increases in response to events that cause the value of paper investments, such as stocks and bonds, to fall.
When paper money appeared, the “thing” that initially gave it some value was gold: each type of banknote or banknote was backed by an agreed quantity of gold. In addition, gold is considered a good store of value, so people can be encouraged to buy gold when they believe that their local currency is losing value. However, investing in gold entails opportunity costs and market risks like any other asset and is prone to generating speculative bubbles, just like stocks. During the pandemic, investors have flocked to gold and silver ingots, gold stocks and exchange-traded funds to protect their wealth, as trillions of dollars have flooded the U.S.
Similarly, authorities such as Campbell Harvey point to the rise of gold exchange-traded funds (ETFs), which has made it much easier for the “average Joe Blow” to “own gold”. .