This is the asset that never fails in tough times, according to experts

With growing geopolitical tensions and economic uncertainty worldwide, many investors resort to gold as a safe-haven hedge

Is it any wonder the gold price has has risen more than 15% this year, surpassing predictions for the year-end in almost 3 months?

Rick Kanda, Managing Director at The Gold Bullion Company, shares his expert insight into why gold is considered to be a safe-haven, useful hedge, why people invest in gold, and why it is a stable choice overall.

 

1. Gold is a safe-haven hedge

“The fact that gold is likely to retain its value even when the market is experiencing turbulence means that investors see it as a safe-haven asset. Unlike currencies such as the US dollar, euro, and pound sterling, gold is tangible, it holds intrinsic value which makes it much less likely to decline. This distinctive quality gives it its reliability as a store of value.”

 
2.  Gold is a useful hedge 

“Gold can hedge against inflation and exchange rate movements, which is attractive to investors. For example, when inflation rates rise, devaluation makes paper currency less valuable. However, gold’s value usually increases, safeguarding wealth. When paper currency declines, gold can protect investors against losses in other assets.”

 

3. Why is gold a good investment?

“There are three main reasons as to why gold is a good investment, and they are as follows:”

• Provides your financial portfolio with diversification: if your other investments fail or decline, you can always fall back on gold. Therefore, including it in your portfolio can reduce overall risk. Gold will never reach zero, it proceeds differently from all other investments.

• Gold is tangible: When comparing gold to your other investments such as stocks, shares, or cryptocurrency for example, gold’s most significant difference is that it’s physical, you can hold it. Tangibility means it does not have to rely on external factors like company performance, government policies, or the state of the economy, allowing it to always hold value showing that it can provide investors with security.

• Universal recognition: Gold is known globally for its value, making it easy to sell and/or trade anywhere.

 

4. Gold is stable 

“Gold is a stable asset, and this quality has been demonstrated time and time again throughout history during key economic downturn periods, a great example is the 2008 recession when the market collapsed and stocks fell but gold surged, so much so that it doubled in value. This also demonstrates that gold holds its value over time and this stability is clearly an attractive quality investors see in assets, especially as they want to protect their wealth during market fluctuations.”

Rick Kanda finishes by saying, “Gold undeniably plays an important role as a safe-haven asset. Its ability to hedge against inflation and currency risks are good enough reasons alone for investors to choose it as part of their financial portfolio—but above all, its historical proof of stability is what makes it most appealing.”