Pros and Cons of Gold Investment

Have you ever wondered why Olympians and many other athletic competitors are awarded in gold, silver, and bronze? Well, that is because those are the most precious metals and it is a way of motivating the winners so they can excel themselves in future.

The two most precious metals are gold and silver, in that order. In which case we can conclude that gold is even more valuable than silver when weighed in monetary value. Does that then make gold the best option you can ever invest in? Let’s find out.

The Pros Of Gold As An Investment

• Ready Market

Gold always has a ready market due to its immense demand and if you are in possession of it, selling it is effortless. Perhaps it is the most sellable asset you can ever possess.

• Stability

Gold prices may change from time to time, but that it will always be valuable in the long-term remains undeniable. People who make losses in gold are people looking to make a quick buck by buying and selling too quickly.

• Almost Inflation Proof

Gold can be used as a shelter against financial losses even when regular currency deflates in value. Gold can be sold in different currencies at a potential value even when some currencies’ forex rates are affected by inflation.

• Secure Investment

Gold is stored in physical form and therefore it is not prone to risks such as money stored in financial institutions that can be affected by inflation, loss of investment through the collapse of banks, or even hacking issues as has been witnessed in cryptocurrency and other electronically stored wealth.

The Cons Of Gold As An Investment

• Buying or Selling Issues

Gold attracts all kinds of brokers or middle-men who may be out to con unsuspecting traders. Many people have lost their fortune to shady gold dealers who use people gullibility with gold to their advantage. It is primarily fuelled by the notion that this commodity is so precious that any amount of it is enough to change fortunes.

• Security Issues

Gold is one of the riskiest items you can ever possess. Sometimes people have to pay banks to store their gold for them, not just as security but because the possession of it exposes you to many risks ranging from fraud to theft.

• Long-Term Stability

Gold’s stability lies in the long-term. Many short-term investors have made losses as gold has a history of rising and dipping in value over time.

Comparing Gold And Silver

Gold and silver are the two most precious and most preferred metals when people think of investing. However, in a contest of silver vs gold as an investment opportunity, there are a few essential things you need to understand. Here is a comparison that might help you decide on what would serve you better.

Demand

Gold has a more ready market than silver due to its demand, and there is always a willing buyer.

Volatility

Over the last years, silver has fared better as an investment due to its volatility. Since silver has a higher probability of decreasing or increasing in value than gold, its price can also far outdo gold, as has happened twice in the last fifteen years.

Banks, including most central banks, are ready to accept gold as value. But, they are reluctant to keep silver, perhaps because it is more volatile than gold and banks might end up losing money.

Ease Of Storage

Gold is easier to store and transport than silver, because it is very dense and therefore same size of gold is more expensive than the silver of equal size.

Conclusion

Evidently, gold is a great investment anyone would be willing to take. Aside from the apparent security issues, it poses when you store it by yourself, investing in this commodity would be indeed a wise move.

Its strongest advantage is the fact it is almost immune to inflation and can bounce back even when other conventional currencies take a dip. The only thing to remember though is that it works better as a long-term investment option.

 

Join our newsletter

If you like Critical Financial, subscribe and get our latest content via email.

Powered by ConvertKit

Share this post:

Leave a Comment

*