Historically, gold has held the position of being a safe haven investment for investors who want to store their wealth in a low risk, guaranteed returns vehicle. Gold offers shelter from the share market uncertainties, economic instability, and currency downtrends. Storing a 10-gram gold bar requires lower maintenance than holding cash of that much amount, plus, the value of gold continues to rise exponentially. In spite of the pandemic, in the last year gold rallied at historic highs after a short-term downtrend.
It’s a Buyer’s Market
The past year we witnessed gold touching historic highs of US$ 2,067 per ounce in August 2020 as World Gold Council (WGC) data. These peaks may have been a result of the Covid-19 pandemic infused panic that led people to opt for this self-haven investment. Gold can have frequent price changes in high volatility periods and very low-price changes during low volatility periods. Almost any issue including, currency rate fluctuations, inflation, asset allocation, and even a country’s geopolitical situation can affect the price of gold. Also, there is the looming factor of demand and supply that affects all commodities. In the face of one of the largest global economic slowdowns since World War 2, gold bullion showed its best rates in 2020 since 2010.
The Dollar lost 7.5% of its value in the forex market, falling to 2.5 years low in Asian trade. The US stock markets rose 18.3% since 31st December, setting another all-time record high. The real US interest rates that are measured by inflation-protected Treasury bond yields fell to a multi-decade ow of -1.08% per annum while real rates fell back within 1 basis point of the level. This implies that the US dollar holders will lose more than 1/10th of their purchasing power over the next decade leading to an annual inflation of 1.99%. Investors have clamored to purchase gold bullion after seeing the steady 10-gram gold bar price, that has held against the economic uncertainties.
Investing in Gold Bullionui
On an optimistic note, investment in gold bullion, especially from a reputed mint such as Pamp Suisse will earn more than the face value of the bar or coin one purchases. An untampered gold bar or coin in its original assay pack is worth far more as a collector’s item in the market. Last year proved to us that a 20 kg gold bar price, even if it may fell to be high is yet nominal. Storing one’s savings in the form of a gold bar protects one’s earnings against the economic upheavals and as the value of gold rises, one continues to earn even from their “idle” cash. In the USA, actions from the Federal Reserve would prove beneficial for gold prices as it would hurt the US Dollar rates and increase inflation.
If you are investing in physical gold for the long term, then you can expect great returns especially since demand for gold is rising in the face of the positive outlook created by the dispersion of the Covid-19 vaccine. Fear of the pandemic has made people safer investment options more in the past year. It has also shown people why it is important to invest in some secure instruments as a hedge against uncertainties and risks emanating from other investment vehicles.
The price of 20 kg gold bar price in USA is US$ 1190670.75 as on January 2021. If the vaccine succeeds in culling the threat of the Covid -19 virus then this price may not hold strong over the short term. However, over the long term, any investor with currency stored in the form of a gold bar is bound to earn more than what they paid to purchase it in the first instance.