Gold has fascinated civilizations from the very beginning. The precious metal predates paper currency by millennia because it was always seen as not just beautiful but intrinsically valuable.
Today, in a world of cryptocurrencies, rising interest rates, surging housing costs, and unsteady economies, gold can still be appealing to people trying to hedge against a recession. Should you buy it?
There isn’t a universal, one-size-fits-all answer, as it depends on your finances, temperament, and portfolio. But here are a few considerations to mull over before deciding.
Why is Gold Thought to Be Recession-Proof?
Societies worldwide and across time have placed an innate value on gold because it’s beautiful and rare. Gold is expected to be valuable long into the future because it’s been valued so highly for millennia already. Plus, it’s one of the rarer metals found on Earth.
Governments can mint more currency and print dollar bills, but it’s impossible to simply produce gold. That’s why people think it’s resistant to economic trends and the market’s vicissitudes. Historically, when economies begin to go south, investment in gold rises.
Gold is a status symbol. These things factor into why it’s a timeless investment. Stocks go up and down, even banks can crash. If it’s hard to imagine gold not being highly sought after, it’s because it always has been.
Buying Gold to Wear
Gold comes in several different formats. People often buy elaborate gold jewellery with other precious stones set inside to wear both for aesthetics and as a status symbol.
Others prefer solid gold bracelets with less flare. There’s classic yellow gold, rose gold, white gold, and more. These different colours are created by alloying different metals. Whatever colour the gold, it’s all real, but jewellery setters often alloy gold with other metals or it would be too soft for wearing, fabrication, and stone-setting.
Gold jewellery is typically not recommended for investors who are looking for a recession-proof asset. If you are thinking about resale value rather than style, look toward gold bullion instead.
Bullion and Coins
The industry leaders in selling gold bullion offer investment-grade gold, which is typically at least 99.9% pure. Bullion bars and coins are almost pure gold, where gold jewellery is alloyed with other metals to give durability so that it can be worn.
Investment-grade gold is usually stored somewhere very secure, like a home safe, and it’s commonly insured. It comes in a variety of weights.
Time may not be of the utmost importance when dealing with such a timeless investment as gold.
Other Ways to Buy Gold
Not every way to buy gold involves wearing or possessing it. Investors can purchase vaulted gold, which means they own an amount of gold on paper, but it’s stored elsewhere. This comes with storage and insurance fees.
Investors can also opt for Exchange-Traded Funds, wherein they purchase shares of a fund, and that fund owns the gold.
No two people have the same lifestyle or finances, so unsurprisingly our approach to investing should differ too. Only you can decide if gold is the right investment, but you should consider the above points and more before you do.
is a seasoned business writer and expert, specializing in delivering concise and insightful articles. With over a decade of experience in the corporate world, She brings a unique perspective to work, offering practical advice and actionable strategies to help entrepreneurs, executives, and professionals navigate the complexities of the business landscape. Her writing combines a deep understanding of industry trends with a passion for empowering readers to achieve success in their ventures.