Is Buying Gold In 2021 Good or Bad?
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During the pandemic of 2020 and into 2021 you’d be wise to thoroughly research where to invest your funds. In this article, we’ll go through the reasons behind why you might invest and perhaps why you may not.
The reason why so many people turn to precious metals during times of economic and political unrest is that Gold has been shown to fair well with and this has been proved with an increase of 25% in 2020.
So what you’re rightly asking yourself is have I missed the boat and will Gold continue to rise or should I be looking at alternatives. Let’s have a look and find out the question, Is Gold A Good Investment?
By the way, I’m William (or Dollar Bill to my friends) and I’m fascinated with gold and investing, hence the reason behind all this content I love to publish. If you have any questions please feel free to leave a comment, I love connecting with my fellow investors.
What Is That Makes Gold A Wise Investment?
Gold has always been a go-to investment, especially in times of crisis. Its lack of volatility and the increasing cost of production has increased its value year on year.
Gold is still a fairly rare precious metal throughout the world. It’s labor-intensive, hard to reach and a time-consuming process to get it to the product we all know and love.
Due to its unique chemical and physical properties, it’s excellent at conducting electricity. This is a reason we find it in computer components and in the aviation/space industry.
These are some of the reasons that Gold is traditionally seen as solid investment for the future.
What Are The Experts Saying About 2021 Gold Investments?
Some experts agree that it’s likely Gold will increase in value during the first half of 2021 and then decrease in the second half. There’s a couple of things at play here as the continued reduction in geopolitical risks and accommodative monetary policy tend to decrease the value of Gold.
Although there are other analysts that don; ‘t agree with this due to what happened in 2020 and are certain that Gold will increase significantly in 2021!
There is perhaps some truth in the fact we have never quite seen the climate of recent times and the purchasing powers of global currencies will all most definitely decrease. This can only really mean one thing and that’s the increase in the value of Gold as people then go for the safety of precious metals.
With low-interest rates and a weak US dollar this usually supports the stable value of Gold. The big question is when will things go back to normal or at the new normal. Some analyists say the second half of 2021 but that could be hugely optimistic with new variants of COVID19 arising as we type this article.
As long as the economy is unstable then gold is likely to be a safe haven.
What you have to ask yourself is: Do you think the economy will recover quickly and thus bring the value or should you get in whilst it’s still on the rise?
The Good and The Bad Of Gold Investments
Crisis or not, there has always been an interest in investing in Gold. As with all investments though there is an element of risk and Gold is no different. Let’s help you see what’s Good and what’s Bad!
No price fluctations on Gold itself, only those of stocks and securities
The price of Gold rises over time, great for longterm investment
Gold is often viewed as a global currency as it keep it's universal value independent of world wide currencies
A goto in times of crisis protecting against inflation, devaluation and market fluctuations
What Does It Actually Mean To Buy Gold?
Gold investment has changed dramatically over the years and no longer means actually buying the physical product. It’s time to see how that’s changed over the years and go over what’s available as an investment in today’s market.
Gold Coins And Bars
First of all the easiest form is buying the physical Gold Bar itself. This can be purchased from the bank and is a simple process.
The only issue is you then have to store it and insure it. Depending on how much Gold you then invest in will depend on how much it costs to maintain it. There is also thew big split between the purchase price and sell price which means it’s only good for a long-term investment.
Gold coins are gaining popularity and can even be picked up at stores and auctions. Although they have the same downside to bars they can be much more flexible and stored in smaller amounts to start with.
Gold Mining Stocks
One way around storage and insurance issues would be to invest in the stocks of Gold instead. it’s not the same as investing in the precious metal directly as a physical good but it’s attractive in the sense of dividends. This can protect investors against downturns as dividends are calculated from companies’ profits.
The share price will be affected by other factors such as supply/demand, competition, individual business processes, and in some form, taxes.
This a publicly traded fund that is linked to the investment within the portfolio itself.
A Gold ETF therefore would be linked to the actual precious metal. The big advantage here is the lower price to invest in Gold but the major drawback is that it’s still only ‘paper Gold’.
Another thing to consider here is the broker, management company, and exchange markets. It’s worthwhile doing your due diligence here before making an investment.
A good option for both the long and short term if investing in the physical metal is not an option for you.
After All That, Is Gold Investing Still A Good Idea?
The main thing to ask yourself is what do you think the economy has in store for us. If you believe, as many of the analysts do, that a recession is on the cards then Gold could be a good option.
Although it’s impossible to predict exactly how it will go over 2021, history tells us people invest more in Gold when the economy is in for a bumpy ride.
Out of all the possible ways to invest, we’d recommend reading up a bit more on the key players in this area. These are companies that you’ve probably already heard of and we take a deep dive to reveal the Good and the Bad of each.
Refer back to the homepage for our TOP 5 GOLD INVESTMENT COMPANIES and from here you can locate each of their in-depth reviews.
We hope you enjoyed this article and always we’d love to hear from you.
All the best,
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