Is Now the Right Time to Invest in Gold?
By Adrian Ryder, Gold Investor and author
Gold has been recognized for centuries as a store of value and many cultures prize gold above all else for this reason. The value and credibility of gold is very much a part of our everyday language without us probably even being aware of it. How many times have you heard the phrase “good as gold” or heard people mention a “golden opportunity”?
Whilst typical investment vehicles such as stocks shares and bonds can react negatively during turbulent economic times, gold tends to hold its value and often increases in value as investors’ shift their capital away from risk assets to “safe haven” assets of which gold is the most recognized.
Up until the early 1970s the US dollar operated under the “Gold Standard” where every dollar in circulation was backed by physical gold held in vaults. This ensured that the dollars purchasing power and value was maintained. Sadly the US abandoned the “Gold Standard” in 1971 under Nixon, and this paved the way for the type of excessive money printing that is happening to this day, with nothing actually backing the value of the money printed.
Sadly since the 70s the US dollar has lost a tremendous amount of its purchasing power. Gold on the other hand has increased in value dramatically. Were you to have purchased one ounce of gold in 1970, it would have cost you around $38.00 that gold at today’s valuation would be worth around $1964.00, a huge gain in value!
The future of gold investment is looking decidedly rosy with educated commentators such as Juerg Kiener of Geneva based Swiss Asia Capital a well-recognized player in the international investment field predicting that gold could soar to $4000 per ounce in 2023 alone on CNBCs Street Signs Asia broadcast recently.
This may seem like a bold prediction however it is backed up by some very bullish market signals. Globally Central bank gold buying last year was the highest in any year on record, countries buying gold in large quantity include China, Singapore, Russia and surprisingly Turkey [who have a staggering 500 tonnes of gold on their books]. They like a lot of other countries are buying physical gold to hedge against inflation. Last year was the thirteenth year in a row of net gold buying by Central Banks and this trend shows no sign of slowing.
The World Gold Council, the market development organization for the global gold industry recently stated “Looking ahead we see little reason to doubt that central banks will remain positive towards gold and continue to be net purchasers in 2023 and beyond”.
There are other significant trends happening which could also bode well for gold price going forward. One such is Sovereign nations looking seriously at either backing their own currencies with gold to preserve its value or alternatively creating a gold backed stablecoin [a digital asset].
There are rumours around the possibility that the BRICS nations may look at a gold backed digital currency to facilitate trade between themselves.
An increasingly popular way for US seniors and retirees to get involved in physical gold investing is by means of a Gold Backed IRA or 401k, and due to an increasing demand it is now a fairly straightforward process to change some or all of your existing IRA or 401k to one backed by physical gold. Making this change is accepted by the IRS as a non-taxable event.
Many astute, financially intelligent and wealthy Americans, who have built up a substantial retirement fund such as Hall of Famer Joe Montana and TV host Mark Levin are looking to Gold IRAS to protect their lifetime’s accumulated wealth.
There is a process involved and specific rules and regulations around the types of gold you can invest in, as well as very clear rules around storage of the gold you choose to purchase [you must store your gold in a licenced depository, home storage is not permitted under IRS rules].
A reputable precious metals company will educate you on the advantages of a Gold Backed IRA and if you feel that it is the right option for you, tailor a package that suits your lifestyle, timeframes and individual investment goals and assist you navigating the paperwork and legalities involved in making the switch.