As gold prices reach a record high, is it time to start investing in the yellow metal? Two experts hash it out in this week’s Debate
Physical gold has proven to be one of the most reliable and enduring investments throughout history. In times of economic uncertainty and market volatility, it remains a trusted store of value. Unlike paper assets or digital currencies, physical gold is tangible, offering a sense of security that is hard to replicate. Its limited supply and inherent scarcity ensure that, over time, gold retains value, often appreciating during periods of inflation and currency devaluation – and that’s why we should all be buying gold.
Diversification is key to a robust investment portfolio. Holding physical gold provides a hedge against the risks associated with traditional financial assets such as stocks and bonds.During economic downturns, gold often outperforms other assets, giving investors peace of mind when other markets falter. Its independence from the policies of any single government or central bank further underscores its value as a safe haven asset.
Physical gold is universally recognised and accepted – it sits above any currency, making it a liquid asset in global markets. This liquidity means that in times of need, it can be readily converted into cash or used as collateral. Unlike digital assets, it is also immune to cyber-attacks and technical failures, providing an extra layer of security.
Buying the yellow metal is a prudent decision for those seeking long-term stability, portfolio diversification and a safeguard against economic turbulence. It is an investment that not only preserves wealth but also offers a tangible and secure asset in an ever-changing financial landscape. Physical gold serves as a reliable foundation for preserving wealth, ensuring financial security during both prosperous and challenging economic times.
Peter Walden is managing director of Bullionbypost, the UK’s largest online bullion dealer
Gold has traditionally been viewed as a safe haven, but its track record reveals significant limitations as a long-term investment. For instance, while gold surged 148 per cent from October 2008 to August 2011, it took nearly nine years, until July 2020, to reach new highs. Such prolonged stagnation makes it unappealing for investors seeking steady, long-term growth.
A key issue with gold is its lack of productivity. As Warren Buffett aptly noted, “gold… has two significant shortcomings, being neither of much use nor procreative”. Unlike stocks, bonds or property, gold generates no income – no dividends, no interest and no contribution to economic growth. Its value relies solely on the hope that someone will pay more for it in the future.