The popularity of investing in gold has skyrocketed amongst beginner investors in recent years; from gold sovereign coins to gold bullion, ETFs to gold mining stocks and everything in between. With gold prices starting from just £40 per gram*, owning gold is easily accessible and this is one of the key reasons why it has become so popular for anyone new to investing.

But this isn’t the only reason why investing in gold is so popular right now. From safeguarding against economic crises to being able to quickly liquidate your asset, we discuss seven reasons why investing in gold is so popular.

*Prices accurate as of 22nd March 2021

Gold Holds Its Value

It’s no secret that gold holds its value in times of economic uncertainty. This is why gold has been such a popular investment throughout economic crises such as the Great Recession of 2008 and the Coronavirus Pandemic. Whereas all paper currencies lose value over time, there is only a finite amount of gold available in the world, meaning typically remains consistent — the price of gold often increases in times of economic uncertainty. 

As financial commentator Peter A. Burshre once said, “...One ounce of gold would purchase a good-quality suit at the conclusion of the Revolutionary War, the Civil War, the presidency of Franklin Roosevelt, and today.

It’s a Liquid Asset

Gold is considered a highly liquid asset as it’s so easy to sell and convert into cash. Sell your gold bars or jewellery at any pawn shop, second hand gold shop or online dealer, and you’ll likely receive your money within 5-10 business days. Compare this to other types of illiquid investment such as real estate, fine art or memorabilia, as although they can offer excellent returns, you could be waiting months to liquidate your investment.

Wear Your Investment

Unlike most other investments, your gold investment can be worn. As opposed to buying gold bullion or sovereign coins, putting your money into solid gold fine jewellery can be a fun way to invest in this commodity. If you’re looking to get started, we recommend jewellery styles such as gold chains and gold bracelets. These typically make the perfect choice for investors as they require minimal craftsmanship which keeps the total cost much lower.

It’s Futureproof

Gold has been used as currency for over 3,000 years, longer than any other currency in history. In fact, the first gold coins were struck over 2,500 years ago around 550BC. With such a long history and with this commodity continuing to be popular amongst traders, we can safely predict that this will be the case for years to come too. After all, even in the worst-case financial crashes, such as 1929 and 2008, people have chosen to fall back on gold and silver as a solid store of value.

No Specialist Knowledge Needed

Another great thing about investing in gold is that it doesn’t require any specialist skills or training. This is completely different to buying cryptocurrency, wine and even memorabilia, where investing without any prior knowledge would be a huge mistake. It can always help to have some general investment knowledge before investing in gold, but even this isn’t crucial. All you need to do is a little homework, such as checking that you’re buying from a reputable business and that the gold is genuine.

Buy with Anonymity

Unlike stocks, real estate or cryptocurrency, physical gold is one of the few investments that can be bought anonymously. However, it’s worth mentioning that this only applies to smaller purchases and you may have to declare your identity if you intend to buy larger amounts. Of course, no matter how much you purchase, like with any other investment, you’ll still be required to report any gains on your income taxes.

Diversify Your Investment Portfolio

Diversifying your investments is essential to reduce risk and minimise losses. The key to diversifying your investment portfolio is to find investments that aren’t closely related. For example, if your portfolio is stock-heavy, you could consider putting money into bonds or gold. The latter is a popular option as the price of gold increases in times of economic uncertainty — i.e. at times where most other investments decrease in value — meaning it can be a great diversification option. 

Do you have any tips for investing in gold? We’d love to hear! Why not let us know on Instagram or Facebook?

For more articles like this check out the Hatton Jewellers blog.