Is gold a good investment?

Gold investment is becoming quite a hot topic these days. Generally, gold is said to have played a major role in the economies of many nations with gold IRA companies seeing millions of dollars of investment every year. In the olden days it was considered as a universal currency due to its worldwide recognized value. Despite the fact that it is no longer a primary form of currency, it still serves as a long term investment that can prove to be valuable investment.

Demand and Price Trends of Gold in the Market

Before we answer the question of whether gold is really a good investment, it is important to look at the demand for gold and its price trend.

Most of the world’s demand for gold is accounted for by three countries; Turkey, India and China. Studies in these countries have shown that the demand for gold has risen from 200tonnes to 600tonnes.

When we look at the price trend by the year 2011 the price of gold had risen to $1920 per ounce. In some instances the value was said to supersede the consumer price index. Experts do believe that the price is yet to rise to $2000 per ounce.

From the demand and price trend we can confidently say that gold is definitely a good investment. There are quite a number of other factors that define gold as a good investment. These include:

  • The aspect of liquidity and universality. Gold can easily be converted to cash in any part of the world.
  • Gold has managed to maintain its value over generations and generations. Even if prices do decrease the underlying value does not change much.
  • Gold is said to have a hedge against inflation. Any deterioration in the dollar generally results to a higher price of the gold.

Since the commodity is used in production of various products, it means that there will always be a demand for the commodity. As a result this ensures that the price markets for gold are stabilized.