Gold is hitting record prices of more than $1220 to the ounce, this works out to around R315 per gram of gold. There are a number of reasons for this but the most likely is that the price is being pushed up as gold is seen as a safe haven investment. Gold being a real tangible thing is a lot stronger during economic crises than paper money. Paper money used to be backed by gold but as that is generally no longer the case the gold itself becomes the safer investment. So how do you invest in gold?
- Contact a reputable dealer
- Buy according to your budget
- Keep the gold over time
Investments should be viewed as long term strategies to both grow and protect your assets. If a bank crashes, as happened worldwide this year, gold under the bed won't crash. Gold is also easily tradable so while you should hang on to it, it is very liquid and can easily be sold if you find that you need to get hold of your assets and convert them to cash. Gold was used as a form of cash for centuries and modern sophisticated financial products are not as stable a method of holding on to value as holding gold is.
If you want to invest in gold, plan your budget so that you know how much that you can spend on gold and then view that as something to put aside. Gold coins are very popular as they can attain values that are beyond the value of the base metal, especially for special interest collectors. Buying into gold is also an easy way to protect the value of your cash from the ravages of inflation and while the gold price is high now you can be sure that it will remain a safe bet and will not tend to crash out as has happened with the paper economy.