It seems everything in life is losing value these days, creating a very depressing situation worldwide. Inflation results in the dollar buying fewer goods and services than it did just a few years ago. Product containers are shrinking in size while the cost to purchase those products increases. Paper money is facing the possibility of becoming entirely worthless.
Amidst all this doom and gloom stands gold, shiny and pure. Whether in the form of jewelry, coins, or bullion, it puts a smile on the faces of investors in-the-know. This is because they are aware of something many others are not. While the worth of other things declines, gold will never lose all of its value.
Investors buy gold coins knowing that they can convert them to cash someday if necessary. Gold can be used as a mechanism of exchange for goods and services if paper currency no longer exists. It is a liquid asset and can serve as leverage for loans or business dealings. Purchasing gold before it hits a peak price will provide these benefits and more.
Printing more paper money to pay off government debt only makes that paper money have less worth. During periods of inflation, people need more dollars to purchase necessary goods and services, so governments print more money that has less intrinsic value. Inflation is a friend of gold because it drives up precious metal prices. An investor’s gold supply then buys him or her more dollars.
Even if the economy stabilizes in the near future, investors in gold are not likely to lose money. The precious metal will always be desired and rare, lending to its intrinsic value. When gold prices decline, all prices will drop, so the investor’s buying power will be unchanged. The liquid asset of gold will never cease to shine in the eye of the investor.