In a world of unpredictable commodity prices, investment in risky assets continues to grow. Solid Ground looked to the World Gold Council to discover why gold is an attractive investment, and how the future looks for the precious metal.
While gold is often seen as an asset to invest in, it’s actually a big part of everyday life. Gold can be found in smartphones, medical equipment and dentistry, and it is used by many industries on a regular basis. Last year saw a noticeable increase in global demand for the precious metal, and this trend could continue as emerging technologies like self-driving vehicles become more mainstream.
Here for the long haul
Risky investments can be attractive, as the rewards tend to be significant. However, these investments also tend to be more volatile. Investing in gold can help offset this volatility, as gold doesn’t correlate with most assets in the long term.
While looking at gold in terms of its value as an investment, it’s easy to forget that one big driver in the demand for gold is as simple as the way it looks. Jewellery markets can have a big impact on gold prices, and the main driver for the jewellery markets is economic growth. As people earn more, gold purchases tend to increase. Some of the biggest economies in the world, such as Germany and the United States, are growing, so demand for gold is likely to grow as well.
Gold prices and demand in 2018 and beyond are hard to predict with any degree of certainty. In 2017, gold should have struggled, yet it saw double-digit growth. There are many reasons to believe this upward trend will continue, as investors look to move away from volatile assets such as cryptocurrencies into steadier investments
with narrower ranges.