7 REASONS TO INVEST IN GOLD

The properties of gold make it one of the most precious metals in the world – a popular form of jewelry and gift. What if you want to invest in gold? What about gold in an investment portfolio? As we regularly monitor the price and performance of gold, here are top 10 reasons why gold has a good investment portfolio:

#1 Gold has a long history of value retention.

Since its discovery thousands of years ago, gold has been the most popular commodity in the world. Although gold no longer supports by global currencies, it remains highly precious metal, especially during the economic slowdown while other assets are losing values.

#2 Inflation is historically good for gold.

Gold has been an excellent hedge against inflation in the past, as its price tends to rise when the general cost-of-living increases. Inflation eats up cash away and treasury yields, which makes them less attractive investments. It is the main reason behind many investors are attracted to gold.

#3 The demand for gold jewelry is steadily increasing in China and India.

Gold is a precious metal and popular form of gift in China and India – the two largest consumers of this precious metal. This is one of the biggest reasons which drives the gold price always high. In India, gold jewelry ownership is highly growing in numbers. By 2016 Indian households owned more gold than the world’s top six central banks (combined).

#4 The global supply of gold is shrinking.

Gold is a very rare metal – it is another reason why it is so highly valued. At present, fewer gold mines are being explored because the gold exploration budgets are going down.  On the other hand, the mining cost is rising. As a result, the rate of gold production is decreasing and the price of existing gold rising.

#5 Global government debt is rising.

Global government debt is rising and it is around 120 trillion dollars high of all time since 2008. Due to the rising risk of such big deficits a further economic crisis could be on the way. Experienced investors can easily see these financial stats and it will increase their investment in the form of gold.

#6 Central banks are increasing their gold reserves.

Since 2010, the global central banks have been the top to reserve gold. According to the World Gold Council (WGC), in 2017 the total net purchase of gold by the global central banks was 371 tons. This is also a very good sign for gold investors that they can invest some bucks in gold.

#7 Gold and US dollar.

Gold is traded in dollars. When the value of gold increases the value of dollar decreases. Bullion and the US dollar have a long back history of reverse trading. The same thing happens with gold and dollar. In fact, the precious metal gold regularly outperforms the most major currencies every year.

If you are wondering why you should invest in gold then these top reasons can be a part of your analysis.

Yet Another Major Reason To Buy Gold…

Investing in gold is a wise decision and I have been advising you to invest in gold since last year.

And, if you have made your decision not to invest in Gold, then you are missing huge potentiality.

Humans take a few years to mine or extract gold, but it takes millions-of-years for minerals to formulate gold in the deep of the earth’s crust.

It is the continuous process for mining companies, they need to discover for new deposits. Therefore, the number of mining businesses hasn’t been increasing.

Large mining organizations cutting their investigation budgets for a considerable length of time and the investigation budget hit an 11-year low, by the end of 2016.

As a result, the gold price remains almost the same as the previous years, and this is the main reason behind disinterest of investors towards the gold investing sector.

The chart of the Gold Miners ETF (GDX) reflects the same thing what I was trying to explain, the price has been almost the same for five years.

chart of the Gold Miners ETF (GDX)

Also, the gold price was going down by 30% compared to the price in 2011.

To survive in the bad times, gold mining companies had reduced their investigation budgets.

This scenario indicated that the demand for gold will pick up again and there will be insufficient gold supply.

Surprised? Ok. Don’t believe my words!

Major reasons to invest in gold

Pierre Lassonde, the billionaire founder of gold royalty giant Franco-Nevada and former head of Newmont Mining –

“If you look back to the 70s, 80s, and 90s, in every one of those decades, the industry found at least one 50+ million-ounce gold deposit, at least ten 30+ million ounce deposits, and countless 5 to 10 million ounce deposits.

But if you look at the last 15 years, we found no 50-million-ounce deposit, no 30 million ounce deposit, and only very few 15 million ounce deposits.

So where are those great big deposits we found in the past? How are they going to be replaced? We don’t know.”

Ian Telfer, chairman of Goldcorp, who told the Financial Post:

 “If I could give one sentence about the gold mining business … it’s that in my life, gold produced from mines has gone up pretty steadily for 40 years. Well, either this year it starts to go down, or next year it starts to go down, or it’s already going down… We’re right at peak gold here.”

Let’s think! Gold production is peaking, and the large companies are not spending to explore new deposits, these indicate there will be a drastic change in the gold industry when the demand picks.

As a result, all miners will begin to overtake one another to accelerate their production in order to meet the rising demand for gold.

These are already happening – Telfer’s Goldcorp ($8.5 billion) company was acquired by Newmont Mining for $10 billion.

That isn’t a coincidence! Barrick Gold bought Rand Gold in $6 billion.

This is closely what we are expecting where large miners acquiring one another to fix the gold production issue. And If I am not wrong, it should be beneficial for long-term by means of gold prices.

Now, some of the biggest gold mining companies spending $16 Billion (combined) to increase their gold assets. This indicates that there is a big shortage of GOLD – It’s just started!!