Why buy gold?

In times of economic uncertainty and instability, many investors are looking for low-risk ways to protect and grow their money. People have been using gold as a safe haven asset for years, but first time investors might ask themselves 'why buy gold?'

At BullionByPost we believe buying gold makes more sense than anything else. Confidence in the banking system has been irreparably damaged following the 2008 crisis, and people don't trust that their money is safe with people who already lost it once.

The UK economy, as well as that of the world at large, had recovered, but once again suffered a major shock with the outbreak of the Covid-19 pandemic. Unprecedented amounts of money printing have saved stock markets from short-term damage, at the cost of potential inflation in the years ahead, and record levels of peace-time national debt.

Russia's invasion of Ukraine seemed unthinkable for modern times, but has reminded the world that war is still a potential threat. The geopolitical tensions between countries like the US, China, Russia, and North Korea, have driven the global economy for years, and 2022 marks another chapter in the history books.

Gold bullion is the ultimate insurance and, given its ability to maintain a high value, should be viewed as an essential part of everybody’s investment portfolio. Here are some of the many reasons why buying gold is a wise investment.

The ultimate insurance

Owning gold could well be the ultimate insurance for turbulent times. It’s an age old question which people have been asking for centuries – where is my money really safe? More and more people are now choosing the oldest answer: GOLD.

The UK and wider global economy are at risk from trillions of added money. Interest rates are now rising in a late attempt to bring down soaring inflation which is eroding the value of savings kept in the bank. Living costs continue to increase while wage growth fails to keep up, with UK expected to be in a recession in 2022 and 2023.

This is where gold comes in. Gold offers about as much certainty as you can get, and bullion - unlike other investments - will always hold a value. Gold bullion is an effective way of hedging against other investments as its value tends to be particularly buoyant when other investments such as stocks and property are under-performing.

Gold can also be used effectively to insure you against other economic factors such as inflation and deflation, interest rates, stock market jitters and currency problems. Importantly, as a highly precious metal, gold's worth is recognised internationally, and is considered a valuable luxury no matter where you are in the world. An additional convenient, positive aspect is that gold bars and gold coins can be taken with you easily, wherever you go.

It is often said that there is never a bad time to own gold. It is a physical asset, a timeless asset, an asset that cannot be devalued in the way money can be by the government simply deciding to print more through Quantitative Easing. Even in the most extreme and unlikely scenario that the banking system should face collapse and paper money lose all its value, gold bullion, particularly small units of gold such as gold coins, could be used to buy and trade yourself out of trouble.

To protect your wealth

Since the crisis in 2008, people have paid more attention to their finances and are looking harder than ever for alternative methods of protecting the value of their money. Gold offers a long-term safe haven for those looking to protect and preserve the value of their wealth as it will always hold a significant value no matter what. Gold investment should be viewed primarily as a low-risk security asset for yourself and your family’s future.

The unpredictable nature of the UK economy and the Eurozone, especially since Brexit began, suggests further long-term strength and likely rises in the global gold price, but these potential profits should not be the main reason for investing in gold. Bullion should be viewed as a non-speculative, safe, long-term method of safeguarding your wealth. Owning gold offers a unique and interesting element to your portfolio, offering an opportunity to spread the risk from the uncertainty of other investments such as stocks and shares, property, and currencies, which may be under-performing.

To control part of your wealth

The physical ownership of gold bullion bars and coins gives investors the ultimate control over their wealth. Instead of trusting third parties and handing your money over to a fund manager, or even leaving it in the bank, holding your gold at home or in secure storage gives you true control, ownership and responsibility over your own future instead of relying on others to do so.

See how you can store your gold with BullionByPost

This control can only be achieved through owning physical gold bars and coins, not paper gold or electronic gold (ETFs). This control even extends to choosing how, where and when to release the value of part or all of the value of your investment. Hundreds of bullion dealers are willing to buy your gold instantly over the telephone. Investors can realise the value of the gold in just a few minutes and get a bank transfer or instant cash payment onsite the very same day.

More information on why buying physical gold is your best option

Conclusion

With both consumers and Central Banks in many of the world's most powerful economies buying unparalleled amounts of the precious metal, has there ever been a better time to buy gold?

Don’t make the mistake of thinking "I’m not rich enough to buy gold". In some countries like Germany, India and Russia, some of which experienced economic collapse within living memory, buying and owning gold is a very common way of protecting and preserving your wealth, and at BullionByPost we have a huge range of gold and silver starting at prices as low as £20 and going up to over £300,000.

It is advised everybody should own between 5% and 10% of their liquid wealth in gold bars and/or coins, whether you’re a person with some savings or a multi-millionaire. In either case acts as the ultimate guard against turbulent economic times.