3 Reasons Why You Should Invest in Gold Now

For many years, gold has been portrayed as an investment only entertained by a small group of cranks or believers in the Apocalypse. This was a calculated portrayal by Wall Street and an overly compliant media.
 
The truth is, we could never afford to ignore the yellow metal in our portfolios and retirement planning, and that’s truer now than ever before.
 
Global economic growth has contracted appreciably, and yet in 2016, gold has experienced its biggest quarterly gain in 30 years – 16.5% as of the end of March. According to the World Gold Council, central banks purchased 109 metric tons of gold during the first quarter.
 
While the stock market has exhibited sporadic rises and declines, renowned investors like George Soros, Stanley Druckenmiller and David Einhorn have made large investments in gold.
 
In doing so, many of these investors, like Druckenmiller, have publicly expressed displeasure at what they consider unworkable central bank policies. Clearly, then, we’re seeing a wide-ranging, risk-averse shift from paper assets to the yellow metal.
 
As a private investor, you’d be wise to follow the lead of these notables. Here are 3 good reasons why.
 
1. Gold is a hedge against a decline in the value of the US dollar.
 
The price of gold tends to rise when the dollar slides, although there has been some exceptions. This is because investors look for non-dollar-denominated investments, like commodities during a dollar decline. Also, when the dollar loses value, the value of other currencies increase and holders of those currencies will purchase commodities.
 
China has now persuaded the International Monetary Fund to include its currency, the yuan, among the Special Drawing Rights (SDR) or reserve-assets currency, along with the US dollar, British pound, Japanese yen and euro. The outlook for the dollar, then, is increasingly competitive.
 
2. Gold is also a hedge against a decline in the stock market.
 
It is also negatively correlated to stocks. If any of your stock investments are currently sitting in profits, it would be a good idea to divert it to the purchase of physical gold. Stocks tend to be overvalued right now. The price/earnings ratios (P/E ratios) of stocks are depressed. And many companies are artificially inflating the price of their stocks through investor buy-back arrangements. While you shouldn’t panic, it would make sense to steer at least some of your profits in equities to physical gold.
 
3. Worldwide demand for gold is increasing.
 
China has recently overtaken India as the world’s largest consumer of gold. India too has increased its gold imports. Both countries use gold as an integral part of their culture, playing a huge part in wedding ceremonies.
 
Right now, gold is sitting quietly but firmly just above the $1,200 level. Several analysts are calling for it to surge to $1,900 or even higher. You have an unparalleled opportunity to invest in physical gold now.

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