Investors purchase gold to hedge against the risk of economic crises and high inflation. The precious metal is a safe investment even in turbulent times.
For thousands of years, it has been synonymous with wealth, power and stability and continues to exert its fascination on people. For centuries, it served states to hedge their economies by linking the price of gold to the respective currency.
The price of gold can develop freely on the world market and is currently EUR 1.760 (on August 6, 2020) for one troy ounce of gold.
Gold offers interesting investment opportunities for private investors. It is considered a stable investment that retains its value. In addition, the gold price often develops contrary to stock market and interest rate developments, which makes gold investments a good hedge against economic downturns and full-blown crises.
This quality of the precious metal was clearly demonstrated during the financial crisis in 2008 and 2009. While shares plummeted worldwide at that time, gold gained strongly in value. This development can also be observed in 2020 during the ongoing corona crisis. Additional amounts of money are injected into the market by the national central banks. When the money supply increases, the price of gold tends to increase as well.
In addition, due to its rarity and limited supply, gold offers protection against high inflation rates. As a real asset, the precious metal can protect investors against monetary devaluation in the form of gold bars. In times of crisis, the small denominations weighing 1 g to 2.5 g are particularly suitable as a means of payment.