September 30, 2019

Kitco News recently published an article where they went over some important insights made by Mad Money’s Jim Cramer about why more people should buy and sell gold. He says that this precious metal is a safe haven for your money, and advises that everyone should have 10% of their wealth invested in it. Compared to government bonds, investing in this metal is much safer because it never yields negative and always holds its own value no matter how much time passes.

In regards to favourite stock picks, he notes Agnico Eagle and Barrick Gold, but because gold stocks trade together it doesn’t really matter who you go with. Whether you have gold bullion, stocks, coins, or jewellery, this precious metal is always worth investing in. If you look at what we pay for gold you’ll see a list of market prices for gold and silver that’s updated daily.

Looking at recent trends, this precious metal has been steadily rising in value due to troubling economic times. Cramer notes, "People will keep buying precious metals as insurance against economic chaos,” which in turn makes the value of gold rise as confidence in the dollar falls. Let’s take a closer look at why this precious metal is considered such a valuable commodity and a safe haven for your wealth.

A Brief History

There has been evidence of gold being used in human societies and economies from around the world throughout human history. In many ancient cultures, it was seen as a symbol of power and wealth, and also had ties to their mythology. Take the Egyptians, for example, who mined it as far back as 2000 BCE and used it in their jewellery as well as for decorative coverings in shrines, temples, tombs, sarcophagi, statues, and more. The Romans would later have mines in Africa, Portugal, and Spain, and smelted gold into coins for currency, like the famous Roman bezant that was in currency from the 4th to the 12th centuries CE.

It’s actually pretty amazing to think about how this precious metal has held its value over all these years (from ancient civilizations to the 1870s gold rushes and beyond) but this is exactly what makes it so valuable. Though this precious metal does not earn any interest or dividends over time, because of its intrinsic value in human societies worldwide, it will always eventually be worth more than what you originally bought it for.

Historically Valued for Its Properties

One of the reasons why you should invest in gold is because it has historically been treasured for the fact that it doesn’t corrode and can be easily melted and manipulated when heated. Its durability and versatility means that people view this precious metal as an easy and effective way to pass on wealth from one generation to the next. As long as the public continues to view this precious metal as something of value, it will always maintain its worth for years to come.

A Crisis Commodity

Even when other investments fail, this precious metal retains its value in both financial and geopolitical uncertainty. During periods of deflation when the economy slows down and is burdened with debt, the purchasing power of this precious metal rises in response. This happens because people seek to hoard wealth in a physical, more reliable form. The same is true when world tensions rise and confidence in governing bodies is low, which is what is currently happening in today’s geopolitical atmosphere. In fact, now is the perfect time to sell your gold in Toronto and earn a profit if you don’t mind losing out on a safe investment.

Perfect as a Hedge Investment

Gold is commonly used as an effective hedge investment against inflation (meaning that it is designed to reduce investment risk). Throughout history, we’ve seen that this precious metal typically appreciates during periods of high inflation, despite stock markets plunging (as we already briefly touched upon). When fiat currency loses its purchasing power, this metal tends to be priced in those currency units and investors flock to it as opposed to the weakening dollar.

Used for Portfolio Diversification

What makes a good investment portfolio? Many would say diversity. A diverse investment portfolio is designed to make investing safer by putting money into different assets that don’t correlate with one another. This is done so that when the economy causes one asset to lower in worth, the other one will rise and offset the loss. As already discussed, gold behaves exactly in this way in contrast to other assets like currency, which is why it’s great option for portfolio diversification.

Increasing Demand

Emerging market economies like China and India have shown an increased interest in purchasing gold in order to diversify their reserves and focus instead on safer liquid assets. It’s been predicted that the Reserve Bank of India will purchase 1.5 million ounces (or about 46.7 tons) this year alone, and that there is room to grow as their holdings are currently only the 10th largest in the world.

Because of tensions between China and the U.S., the former has been buying up this precious metal in record amounts, further increasing the demand for gold on a global scale. As supplies lower and demand increases, prices invariably rise.

Time to Sell Your Gold

With all these factors considered, two things are evident: 1) that gold makes a great investment and that 2) due to current geopolitical and economic uncertainty, now is the time to sell your gold, especially if you have any gold coins, bullion, or jewellery. Not sure how to sell your coins and other precious metals? Bring them to Muzeum where we will evaluate your coins and jewellery right in front of you for precious metal content and will price accordingly based on quality, condition, and market values.

We are the best place to sell gold coins in Toronto and have a reputation for making our guests feel welcome and happy with the money they receive for their items. Give us a call if you’d like to learn more about the services we offer and how much you can expect to get paid for your gold and other precious goods.

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