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Is Gold Still A Good Investment?

Gold bars are one of the things people think of when they imagine wealth or treasure. Gold is known all over the world for its value and history, with wars having been fought and lives lost in its pursuit.

Today, gold remains valuable for a variety of reasons, with many investors still seeking it out. Just look at the 24-karat gold bar price in Canada to see how it is still prized. But is gold still a good investment today? Why are people putting their money into it?

Here are some reasons to continue to own gold today.

It Holds Its Value

Paper money had fluctuated considerably, as have other assets. Gold, however, has maintained its value through the ages. Some have passed gold down through their families for generations, whether as jewellery or in some other form.

Gold will not corrode, and it can easily be melted and reworked to give it new life in new forms. It is also beautiful.

A Hedge Against Inflation

Gold tends to rise in value with the increase in the cost of living. As such, it makes an excellent hedge against inflation. In years of high inflation, gold has increased dramatically in price while the stock market plummets. Gold is viewed as a good store of value. Because of this, when the local currency is struggling, people may turn to gold to protect their wealth.

Protection Against Deflation

Gold is also a means of protecting oneself against deflation. Although deflation—defined as business activity slowing, prices dropping, and extensive debt arising—has not been seen on a very large scale for the better part of a century, gold is considered good protection should it occur. During the Great Depression, for example, the purchasing power of gold grew tremendously, and so for many, gold became the best place to store their wealth.

Decreasing Supply

The supply of new gold has been in decline during the 2000’s, with a large portion of gold in today’s market coming from global central banks. As is often the case, diminishing supply leads to an increase in price. Gold can be expected to increase in value.

An Increase in Demand

Going hand-in-hand with a decrease in supply, there is an increase in demand. In many emerging market economies, gold plays an important part in the culture. India, for example, is one of the largest consumers of gold, where it is valued not only for jewellery, but several other uses as well. The highest global demand for gold occurs in October, which is the Indian wedding season. China has also been seeing a steady demand for gold.

Investors have been increasingly turning to gold as well, seeing it as a worthy class of investment.

These are just some of the reasons to consider gold as an investment. The price of 24-karat gold bars in Canada can be expected to rise, so choosing to invest now is an excellent means of preparing for the future.