What Should You Know Before Investing In Gold

What details should you pay attention to before investing in gold? Let us explore the advantages and disadvantages of this type of investment.

We all know that gold has always fascinated mankind since ancient times and many say it is one of the safest investments, especially as it has held up so well over the millennia.

A brilliant investment, literally. It presents high interest especially in times of economic uncertainty, but it's important to analyze the market carefully before making a decision, because here too there are fluctuations.

Invited to the "iBani" TV show, the economic analyst Catalin Ghinararu talked about the pros and cons of investing in gold.

Is Investing In Gold One Of The Safest Investments?

"It is still a hedging investment, an insurance investment, it remains one of the investments that individuals and even companies turn to in times of economic uncertainty. It's a fairly simple explanation. It conserves the investment and is seen, by the qualities it has, as a way of ensuring your investment even in times when let's say there are fluctuations for others.
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Paper money can be issued in very large quantities, and we have seen this in the pandemic, just recently, paper money was issued in whatever form because there was a need to maintain purchasing power and so on. This is one of the causes of inflation, which is a global phenomenon.

It's an alternative even to investing in shares, they fluctuate according to the performance of companies. Gold has always been seen as a safe, stable investment that retains its value over time. That is not to say that there are no fluctuations in the price of gold."

The Fluctuations In The Price Of Gold

"They depend on the parameters of economic developments. Now, it is true that over time other investments have been considered more profitable. Gold doesn't have an extraordinary return, especially held in the deposits of some banks.

The price fluctuations reflect what's happening in the market, it's not just gold bullion and so on, it's mostly securities that are linked to the price of gold. But it's worth remembering that it's still a conservation element of the investment, protecting the value. (...)

However, we are in a context where gold is competing with other investments at the moment, all sorts of investment vehicles have emerged: cryptocurrencies, there has been a lot of investment in that, we've seen what's happened with this issue as well.
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There is no absolute safe heaven. There are losses and gains. Of course, this investment vehicle in various forms has endured. If you like, that would be the feature, it has endured. From the beginning of history,  when there were no coins, no stocks, no bonds, no real estate investing, and up until now, gold has endured over the millennia."

For Whom Is Such An Investment Suitable For Now

"For anyone. It can be a long-term investment, it can be capitalized at any time. Unlike the others options, which might have problems. In what form? It can be done in bars, in coins, that's how it circulates, in bank bars. They are also very small, and that means portability. And there's another very important feature, the ability to convert to cash."

Is Gold Jewelry Also An Investment?

"Yes, we can say that it is. There is always the problem of conversion into cash, jewelry is also an art object.

It depends on how it was made, by whom, under what conditions, what is the quality of the gold and the quality of the workmanship.

If it's a poorly worked piece of gold, it's not going to fetch much. It also depends on the ability of the person who has it to go and get the best price."

The Disadvantages Of Investing In Gold

"Yes, there are disadvantages, like any investment. It has resilience, it has been proven throughout history that whoever invested in gold eventually got something out of it. Those who invested in other things lost more. There is the downside of price variations. So be careful, you do value it at some point.

If you want to value it at a time of market downturn and you have no other option, it might be below the price of what you bought, and then that's a disadvantage.

It might also be quite problematic to convert it into cash at some point, because bank gold is valued under certain conditions, to go to the bank you bought it from, to value it there, there are some constraints. Gold jewelry would be the one that, let's say, would be the fastest to be valued."

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