Lowtax Network

Back To Top

Four Surprising Benefits of Investing in Gold

Contributed by Luigi Wewege At Caye International Bank
08 June, 2020

There are plenty of great reasons to invest in gold, and many people are already familiar with them.

It is no secret that gold has had an incredible history of value, and one of its biggest benefits is that it is not tied to any one currency, which means that it can be used for its spending power in almost any location around the world.

However, potential gold investors should also be aware that there are still other surprising benefits, and here are some lesser-known advantages of investing in gold.

1. India is the World's Largest Consumer of Gold

In and of itself, this might not seem like a news-worthy piece of information, but it is key for investors who wonder about the long-term value of gold. India is one of the largest and fastest-growing economies in the world.

Along with China, India is by far the world's largest importer and consumer of gold. Approximately, 20 to 25 per cent of global production is consumed in India. By volume, the country imports about 700 tonnes a year, accounting for over a fifth of world jewelry fabrication.

This reveals that many economies outside of the western world attach substantial value to gold. The more that people, businesses, and governments around the world covet gold, the higher its value will be, which is ideal for those who want to buy gold for investment purposes.

2. The Value of Gold Rises Faster Than Wages

It is important to view gold in terms of actual hard currency, especially when you are getting ready to buy or sell gold yourself. However, it is also important to note the historical value of its purchasing power when compared to average annual wages.

Since 1971, gold has become increasingly more valuable even when factors like inflation and currency exchange are considered. If this trend continues, gold purchased today could be worth substantially more decades or even centuries from now.

Oxford Economics observed in a gold research investment report that the gold price has consistently risen faster than the rate of inflation in the United States, thus almost always generating a positive rate of return on any investors gold holdings.

3. Humans Have Mined Almost 200,000 Tonnes of Gold to Date

The best estimates currently available suggest that around 197,576 tonnes of gold has been mined throughout history, of which around two-thirds has been mined since 1950. And since gold is virtually indestructible, this means that almost all this metal is still around in one form or another. If every single ounce of this gold were placed next to each other, the resulting cube of pure gold would only measure around 21 metres on each side.

Despite new mining technologies, however, reaching that gold is becoming increasingly more difficult. Each year, global gold mining adds approximately 2,500 to 3,000 tonnes to the overall above-ground stock of gold. While gold production has shown an upward trend in recent years, this is likely to level off in coming years.

What remains will be challenging to obtain, serving as a kind of limit to the gold available on earth. This is also a kind of safety net that might prevent too much gold from ever flooding the marketplace and reducing its overall net worth.

4. Gold Bullion Prices are Setting Record Highs

One thing that often overwhelms investors is the sheer number of gold types that you can invest in. You might want to buy shares of gold on an international market, gold coins to keep at home or gold bullion to keep in an offshore account. While all can be excellent choices, it is gold bullion in particular that is setting record highs in recent sales.

Even some of the world's largest hedge funds, assign a certain percentage of their total assets invested in gold. Gold is even more of hot-ticket item of late due to the coronavirus pandemic plus recent civil unrest in the USA, and thus gold sales prices are starting to reflect that.

If you are interested in banking or investing offshore, gold may be exactly what you are looking for!

If you are interested in banking or investing offshore, gold may be exactly what you are looking for! For offshore storage there is no better than Fort Kobbe the precious metal experts in Panama.


« Go Back to Articles

Articles Archive

Event Listings

Listings for the leading worldwide conferences and events in accounting, investment, banking and finance, transfer pricing, corporate taxation and more...
See Event Listings »