Advantages And Disadvantages Of Investing In Gold

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Written By Adrian Cruce






Gold investments are recommended by almost everyone and it is quite obvious why. We are faced with constant growth but just as with every single investment out there, we are faced with both advantages and disadvantages. You will need to consider both in order to make a really good decision, one that will be best for you. Market situations are not quite conducive and we are still faced with a crisis. We see that it is the debt crisis that made people get back to gold.

Gold bars
Gold bars

Gold Investment Advantages

The first advantage is that you will not have to worry about inflation when your investment is in gold. Gold prices do tend to rise constantly. This is not because of the influence of the strength of the US dollar. It is simply because of supply-demand associated with minerals and oil.

Gold investments stand out as low risk investments. The prices always tend to go up when looking at the long term. This is something that we will have to take into account since the security offered is really high. You get to invest directly in the precious metal instead of making an investment in something that can be decreased in quality as jewelry because of external factors. Gold investments are quite liquid in nature and you can easily end up getting cash whenever you need it.

Gold Investment Disadvantages

There are many different situations in which gold owners will find it difficult to sell gold. That is because they do not know much about gold standard calculations. At a gold store you will not have transparent information. Everything is not as standard as with the buy-sell prices associated with dollar prices.

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We should also mention the fact that gold is difficult to store. The investment in a really large gold quantity (1 kilogram or more) requires a secure location. In most situations the smaller quantities are going to be stored in a safe but if you have a lot of gold, you will have to consider getting adequate security. Some may even want to rent a safety box. In the event that you are looking for short-term investments, gold is not at all a good option and you will have to consider something else.

The cheap way to invest in gold is always buying gold bullions or gold jewelry from the pawn shop, normally through some sort of auction. That is due to the fact that the auctioned gold will never be affected by making costs. The other option is to buy directly from a mine company.