Worth it's weight in gold - The rising price of gold over the past 10 years
Gold has risen in price over 550% over the past 10 years. This means it usually outperforms all other types of investment. Every time experts say gold prices cannot rise any more they do!
There are many misconceptions about what makes gold prices rocket. People often link gold prices to natural disasters like earthquakes & tsunamis but there is no real evidence to support this. People also used to see oil prices as an indication of gold value fluctuations. Although they are both commodities, they are not really linked.Gold is often seen as a very safe investment even when consumer demand for oil is down.
What does affect gold is any sort of financial uncertainty. World events like recessions means that all at once millions of people loose faith with the banks & buy gold as an investment. As all of this gold comes off the market it becomes rarer & this forces the price up drastically.
Currency exchange rates can also affect gold prices. As gold prices are recorded in the Euro any local changes against this currency affect the price. Also when interest rates are low people would rather invest in gold than leave their money in a bank to earn very little interest. This again pushes the price of gold upwards.
Q. Should I buy gold jewellery as an investment? A. Definitely not! When you buy jewellery part of the value is the shop's profit on the item. Also there is labour that has been paid to make the piece of jewellery. Both of these factors mean that if you bought a piece of jewellery & sold it on within a couple of years you would almost certainly make a loss! Q. How should I buy gold as investment? A. Coins! You can buy & sell gold as shares from a company online but you would never get to actually see it. If you want your own gold to have & to hold then you should buy coins. The coins you should look for are Sovereigns & Krugerrands. These are made of a very high gold purity & are used more as a currency than as a decorative item. Never try to make a 'quick buck' with gold though. Bear in mind you will have to keep your gold for at least a few months, or even years to see a good return.