When it comes to reliable investments, gold is the king of long term profitability. Not only is gold still valuable in the trade market, it’s the only commodity that continually appreciates in value. In terms of fluctuations, gold prices remain steady, even when annual demand drops. In the current investment market, there’s a renewed interest in Chinese and Indian jewelry. These global markets are expected to refuel the demand for gold in 2017. China and India together account for 60% of the market for gold jewelry. This is despite an increase in the amount of taxation on gold imports from India. India also eliminated large denominations. To combat this, investors turn to gold jewelry for asset protection. This is in addition to a drastic decline in Chinese consumer confidence in the latter half of 2016. However, in the opening quarter of 2017, there was an average increase of 20-25% in gold jewelry purchases.
What Makes Gold A Good Investment Option
When there’s a decrease in global demand for other commodities; investors will instead pour money into a stock they can trust. Thus far, gold is that stock. From a trading standpoint, it makes sense to invest in a stock with the potential to uptrend. Even when gold stock prices fall, the following quarter always sees a rebound effect. Regular commodities and open market stocks can’t say the same. During unexpected and predicted downturns in the economy, they take a battering in long term positioning on the S&P 500. So, even when experts predict a fall in the Dow, the price of common stocks fall in value. Negative stock market downswings never cause a decline in gold prices. Presently, gold prices are on the rise, with China and India leading the way. Together, these are the two largest areas for the annual demand for gold jewelry, with other global regions accounting for the remaining 40%.
Gold Retains Its Value
What makes gold a good investment option, is the fact that it retains its value for the long haul, continually outperforming other commodities in a bear market. As soon as there’s a price increase, gold can be quickly sold and liquidated into cash. Even when gold declines as a traded commodity, the value remains the same as a precious metal. So it can be said that the stock price of gold does not affect its value. Whenever there are inflationary changes in the stock market, the value of gold actually rises, because investors turn to gold for commodity protection. Although gold is priced in dollars, the value isn’t diminished by outside factors such as inflation or a decline in the US Dollar. So, as a portfolio addition, gold is a solid investment choice even if you use a third-party bullion storage, because it will always perform well as a globally demanded commodity.