As we continue to venture into 2022, many of us have made resolutions for the new year, with some of us hoping to improve the state of our finances after a difficult couple of years. Price rises in gold and silver during the pandemic have recently led to investors flocking to precious metals, many for the first time. Long before the days of stocks and bonds, gold was one of the earliest traded assets, and could present even more opportunities to investors today.
Here we will cover why people invest in gold, and whether precious metals could be a good investment for you in 2022.
Why Do People Invest in Gold?
There are many benefits to investing in physical gold, from managing risk to making a profit. Here are some reasons why you might want to consider purchasing the asset.
A major reason why people invest in gold is due to its protection against interest rate decisions and the printing of further money. With gold being a scarce asset, the metal is seen as a safe haven in times of economic uncertainty, instability, and when there is low confidence in the banking system. The scarcity of gold often makes it a reliable investment choice in comparison to other commodities such as oil trading and the agricultural industry, which are all affected by seasonality and the state of the economy.
Gold offers protection during times of economic hardship when prices increase and the purchasing power of money falls. This is due to three factors that influence the price of gold: supply, demand, and investor behaviour. All three of these factors have recently been at an all-time high. The general logic is that gold appreciates when the value of currency falls, as investors rush to purchase gold to avoid further losses in money.
Many investors purchase gold to balance their portfolio. This asset allocation can ensure that risk and volatility are reduced during a downturn where they may be unable to rely on other assets.
Gold is trusted by many due to its wealth preservation qualities. For example, if you bought £100 worth of gold in the 1990s, & at the same time you saved £100 in notes. The £100 in notes has not increased in value and cannot buy as much as it could have in the 1990s, due to inflation. However, gold has gained in value, so the value of the gold investment far exceeds the original £100 investment.
How Is the Price of Gold Determined?
The most important factor for you to consider when investing and paying for gold is the spot price. The spot price is the current market value of gold, and is constantly fluctuating, so it is important to find the most up-to-date price possible. You can then use this to research which bullion dealer offers the lowest premiums. Take a look at our pricing charts for live gold prices and latest market updates.
Gold Bars or Gold Coins?
Deciding to invest in physical gold and in bullion bars or bullion coins should take some consideration before making your decision on which to go for.
Investing in gold coins offers great flexibility, as your investment is easily stored, readily available and is easily separated into smaller units to release part of your investment as and when you may need it.
When buying gold coins you can choose from a variety of sizes such as 1/10oz, 1/4oz, 1/2oz and 1oz. Popular gold coins include the British Gold Sovereign, and Gold Britannia, these are very popular with UK investors due to their GCT free status (you can read more about CGT here).
Investing in gold bars, especially the larger size bars, offer great value due to their larger unit size and lower manufacturing costs. If you are planning on keeping your gold for a long time with no plans to sell any part of your investment in the near future, then the larger gold bars could be ideal for you. The downside to this could be the lack of flexibility compared to coins, for instance, as the investor is unable to release part of their investment to reinvest or for access to cash and would have to sell their entire gold bar.
When is the Best Time to Buy Gold?
The best time to buy gold is down to personal choice. Many people choose to buy gold whenever they can, whenever they have the money, in small regular quantities.
It’s a good idea to keep an eye on the gold price. This price changes every two minutes and can often dip by a few percent in a single day, meaning any time may be the perfect time for an investor to buy. However, some gold investors are often happy to buy during stable periods; it is all about choosing to buy gold at whatever time it feels right for you.
Gold Market Outlook For 2022
Global financial uncertainty due to Covid-19 caused the price of gold to rocket to record-breaking highs in 2020, and continues to be a major player in driving the price. Uncertainty is an important word in the world of precious metals, and we have certainly never seen times like those we have experienced in the last couple of years. If financial uncertainty continues, most likely propelled by weakened economies due to the pandemic, we could possibly see gold continue to stay strong in 2022.
Gold For the Long-Term
There can be many benefits to investing in gold, especially in times of economic uncertainty, instability, and at times where there is low confidence in the banking system. Holding physical gold bars and coins can provide ultimate long-term control over your own wealth, offering a timeless safeguard against financial crisis.
Investing in gold should be seen as a long-term investment or as risk mitigator for an already existing investment portfolio.
How Can I Sell My Gold?
It is very important to invest with a bullion dealer that has a transparent market for buying back your gold at a favourable rate for when you choose to sell your precious metals.
As well as having a large selection of gold coins and bars for sale, here at Atkinsons Bullion & Coins, we also buy these items back. Prices do vary depending on the item, please see our ‘Sell to Us’ page for more details and to find out how much your gold bullion could be worth.
Buy Gold Online at Atkinsons Bullion
At Atkinsons Bullion, we are fully authorised premium resellers and we supply gold and silver bullion with the finest range of gold coins and bars. Buy gold bullion securely with us and enjoy competitive prices and great customer service.
Points to Remember
- If you want to protect yourself against financial uncertainties and take control of your own wealth, gold or silver bullion could be a sensible way to invest.
- Ensure you do your research and buy from a reputable bullion dealer at a reasonable price and make sure that the type of gold or silver you choose to invest in correctly reflects your future goals.
- While a highly attractive investment, like all financial assets, gold and silver investment is not without its risks. If you are unsure, we would always suggest consulting with a financial advisor.
If you have any questions or would like to know more about buying gold and silver from Atkinsons Bullion & Coins, please call and speak to a member of our knowledgeable team on 0121 355 0620 or email us at email@example.com.
This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.