Those who own gold are often tested. In the past, sharp rallies have always been followed by sharp corrections in the price of gold. From time to time, the yellow precious metal falls for no apparent reason. And even when signs of further growth in its price seem obvious, it is nevertheless not moving forward. For this reason, gold should not be viewed as an investment, but primarily as insurance. Because the long term is important. Read on for a few more good reasons why you should buy investment gold.
Since the abandonment of the Gold Standard 50 years ago, the value of gold has shown impressive growth. When Nixon closed the golden window, the price of the yellow precious metal was $ 43 an ounce. It happened on August 15, 1971, and since then its value has increased 42 times, and recently it reached $ 1,800. So overall, gold is doing well.
However, this skyrocketing price increase has been repeatedly interrupted by prolonged phases of stagnation or even strong bear markets. For example, in the early 90s, no one wanted to know anything about gold. The fact is that at that time an optimistic mood reigned in the financial markets: the fall of the Berlin Wall, the transition to the European Economic and Monetary Union, the “new economy”. It seemed that the stock markets did not know the limit of growth. The parallels are certainly recognizable nowadays.
It is worth recalling that in those years, Great Britain, under the leadership of Treasury Secretary Gordon Brown, dumped most of its gold reserves on the market. As a result, the value of the precious metal plummeted from $ 425 to $ 255 between 1990 and shortly before the "new economy" bubble burst in 2000 (dotcoms). Thus, the gold price correction was 40%.
But suddenly the "golden hour" has come. Because governments and central banks have gone into a permanent bailout of their economies. Confidence in public money continued to wane, and the monetary authorities had their hands busy to keep the financial system afloat and the promised constant growth - right up to the present day. Thus, in the period from 2001 to September 2011, the price of gold increased by 7.5 times, namely: from $ 255 to just under $ 1900 per ounce.