Historically, gold has been perceived as a safe haven asset during times of uncertainty. It has also been considered a way to hedge against inflation. However, holding physical gold comes with its own unique costs and risks. The question is whether it is still worth owning this precious metal.
In this article we will look at the evidence about whether or not gold has been a good investment in recent years, particularly when compared to the S&P 500 index. However, the period that we are examining is just one snapshot of time. Looking at longer or shorter periods may show gold outperforming the broader market, or vice versa.
We will also consider the need for central banks to report their holdings of gold, and how these can be aligned with their accountability framework. Currently, the accounting for monetary gold is varied and inconsistent, making it difficult to compare central bank accounts, and weakening the overall accountability framework. We have therefore developed a new guidance that would help to address this issue, by providing a common framework to recognise and account for monetary gold held by central banks in a manner consistent with their functional objectives. Did you know that there is this news story about gold investment?
Gold is a precious metal that is a key element of global economic infrastructure. It is a dense metal that has many uses, including jewellery, decoration, dental work, plating and coinage. It is also a popular commodity among investors, who seek to diversify their portfolios by buying physical gold in the form of coins or bullion; or indirectly through exchange-traded funds (ETFs), physical gold futures contracts, or shares of well-managed gold mining companies.
Unlike other assets, such as stocks and bonds, gold does not generate an income stream through dividends. But, the price of gold does rise and fall with its spot price, meaning that those seeking to make a steady stream of income from their investments need not necessarily avoid investing in gold. Indeed, a number of leading conservative hedge funds have recently become bullish on gold, citing concerns about a potential global economic slowdown and unlimited money printing as the reason behind their positive outlook. This could lead to a further lift in the price of gold.