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5 Surprising Facts About Gold

By    |   Monday, 15 June 2015 05:39 PM

Owning gold can make some people feel rich, but gold doesn’t usually rise in value as fast as other investments. The major advantage of gold is security in your investments. The precious metal retains a certain value over time.

Here are five surprising facts about gold:

1. Gold was actually among the least volatile of commodities between 2003 and 2013, according to U.S. Global Investors. The precious metal’s standard deviation was at about 14 percent over the 10-year period compared to the volatile performance of nickel at nearly 60 percent. Although gold prices can rise or drop significantly during certain periods, gold generally remains a secure investment in the global economy.

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2. China became the world’s largest consumer of gold in 2013, overtaking India. The demand for physical gold, such as gold bars and coins, increased by more than 30 percent in 2013 by China, which imported some 1,066 metric tons of the metal, according to the World Gold Council.

India, which has strong regulations on imports, still increased its consumption by 13 percent in 2013.

3. Although gold prices can fluctuate and at times fall low, the future of gold continues to look bright, according to the Real Asset Co. Currencies and debt in some countries, including the U.S., remain a concern, so investors look to gold for its security.

The U.S. was taken off the gold standard in 1971, but a growing number of officials and investors are considering moves to back the U.S. currency with gold once again.

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4. Gold has been a hedge against inflation for centuries, but its returns don’t stack up that well against other investments such as real estate. Investments in real estate and stocks other than gold can rise dramatically during good economic times. Gold has an average of only 0.8 percent above inflation, according to Bank Bazaar.

However, real estate and financial markets can drop significantly in bad economic times, making gold a safe haven. Maintaining at least 5 percent of investments in gold provides security rather than quick profits.

5. Physical gold, such as bars and coins, are the choice for investors who fear banks or holding companies going under, according to The Globe and Mail.

However, there are extra costs involved for storing gold in safety deposit boxes or through bank vaults. Also, coins and bars may cost more along with dealer commissions than the current established price. It costs you more to store your own physical gold, but the cost goes into an investment that offers safety during a downturn in the economy.

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Owning gold can make some people feel rich, but gold doesn’t usually rise in value as fast as other investments. The major advantage of gold is security in your investments. The precious metal retains a certain value over time.
gold, surprising, facts
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2015-39-15
Monday, 15 June 2015 05:39 PM
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