When people like to invest in something that is safe, they rarely do it in something else than real-estate, bonds, and gold. The last one is one of the items that is most beloved for investors. The reason for buying this precious metal is that it’s one of the items whose price almost never goes down.
Why is it like this? The reasons for this are going to be talked about in this article. Follow up if you want to know more about it!
The amount is almost always the same
The amount of gold, unlike the currencies, is always the same. This precious metal is almost indestructible. The fire almost does no damage to it, and the floods can’t touch it since it’s almost always stored in safes that are even harder to be moved from the place. See more about what moves its price here.
Sometimes people lose their wealth or it gets damaged. This amount is compensated by the gold mines around the world who only produce a little new product. That’s why there’s no fluctuation in the price – there’s no problem in this part, unlike the currencies whose governments often print a lot in times of trouble. Printing more bills make the currency drop in value.
The demand is always high
The market is the same for all products. When there’s something in high demand, the price of this product goes up. It’s the same with the precious metals. These products are always in high demand. The reason for this is because they are a great way to conserve money and make sure their value is not going to disappear.
Everyone who wants to store their wealth chooses some kind of precious metal with a few of them being especially wanted. That’s why gold prices never goes down. There’s always a demand for them. For example, if you decide to invest in real estate, which is a great investment, you can be sure that the money is not going to fade away, but the return in real currency is not as easy.
What does this mean? If you want to sell a house that you bought, you’ll have to wait at least a week before you find a buyer for it. With gold, this is way easier. You just go into the jewelry store, and the person there will be glad to give you cash on the spot for the amount you’re going to provide. That being said, it’s clear that the actual worth here is much bigger because you can validate the money very fast.
The wars and natural disasters can’t make a change to it
Have you noticed that all great world dictators store their wealth in giant safes and when the liberators arrive and open the bank safe, they find massive amounts of precious metals? Why? Because this is the best way to be sure that when a crises come, and a crisis will surely come when you’re a dictator, you need something that will make your wealth valuable.
If the world declares war on you, your money becomes worthless. On the other hand, precious metals are valuable anywhere in the world. All you need to do is go across the border in a diplomatic mission, and while you as a dictator chit-chat with the state officials, a person will the gold and change it to an actual currency that can be used for any need.
The same goes for natural disasters and other market fluctuation factors. A crisis of any kind in a certain country or a continent can make one strong currency fall in value. For example, the US dollar may drop several points and suddenly what was worth $100 becomes less worth for the rest of the world so the businesses lose a ton of money on this small market change. Learn more about dictatorship on this link: https://en.wikipedia.org/wiki/Dictatorship.
The gold never has this problem, first because it’s no one’s currency and second because it is never affected by anything around it. There can be tornados, fires, floods, wars, whatever you think about, and its shape won’t change. When all these things pass, the owner can take it out of the safe and sell it for the exact same price as before.