Why should gold be the product that has this unique property? Most likely it is because of its history as the first form of money, and later as the basis of the gold standard that sets the value of all money. Because of this, gold confers familiarity. Create a sense of security as a source of money that always has value, no matter what.
The properties of gold also explain why it does not correlate with other assets. These include stocks, bonds and oil.
The gold price does not rise when other asset classes do. It does not even have an inverse relationship because stocks and bonds are mutually exclusive.
REASONS TO OWN GOLD
1. History of Holding Its Value
Unlike paper money, coins or other assets, gold has maintained its value over the centuries. People see gold as a means to transmit and maintain their wealth from one generation to another.
Historically, gold has been an excellent protection against inflation, because its price tends to increase when the cost of living increases. Over the past 50 years, investors have seen gold prices soar and the stock market plummet during the years of high inflation.
Deflation is the period during which prices fall, economic activity slows down and the economy is overwhelmed by an excess of debt and has not been seen worldwide. During the Great Depression of the 1930s, the relative purchasing power of gold increased while other prices fell sharply.
4. Geopolitical Fears / Factors
Gold retains its value not only in times of financial uncertainty but also in times of geopolitical uncertainty. It is also often referred to as "crisis commodity" because people flee to their relative safety as global tensions increase. During these times gold outperforms any other investment.
THE HISTORY OF GOLD AND CURRENCIES
All world currencies are backed up by precious metals. One of these being gold playing the major role is support the value of all the currencies of the world. The bottom line is Gold is money and currencies are just papers that can wake up valueless because governments have the overruling power to decide on the value of any country currency.
The Future Of Currencies We Are At The Tipping Point
WHY SMART INVESTORS ARE INVESTING IN GOLD?
1. The markets are now much more volatile after the Brexit and Trump elections. Defying all odds, the United States chose Donald Trump as its new president and no one can predict what the next four years will be. As commander-in-chief, Trump now has the power to declare a nuclear war and no one can legally stop him. Britain has left the EU and other European countries want to do the same. Wherever you are in the Western world, uncertainty is in the air like never before.
2. The government of the United States is monitoring the provision of retirement. In 2010, Portugal confiscated assets from the retirement account to cover public deficits and debts. Ireland and France acted …