Advantages of investing in gold on the stock market

Despite the fact that many investors have turned their backs on gold after the significant drop in prices that this asset suffered a few years ago, this investment remains one of the safest and most interesting today. As historical charts show, gold has the ability to be marked by long and strong bullish periods, and it evolves through well-defined and easily identifiable periods. Thus, at the end of each period of low activity a new rise is expected, as at this time. The decline in gold prices since 2012 therefore has great potential to give way to a new upward trend soon regal assets.

Taking positions for gold on the stock market today is therefore an interesting long-term investment, especially for investors who want to hedge their other positions. As the global economic crisis does not seem to be in its final phase, and in fact it could worsen in the coming years, we can bet quite safely that this asset will soon recover its safe-haven characteristic and that its price will skyrocket again.

In fact, the price of gold is especially volatile, so it is interesting to operate with it in the short term through a leverage effect.

The avalanche towards gold and its causes:

If we look more closely at the historical prices of gold, we obviously realize that the general trend since its first price and, especially, since the end of the fixed parity of this precious metal with the US dollar, has been largely bullish measure. And the explanation of this phenomenon is due to the following factors:

  • First of all, it is important to understand that gold is an increasingly rare product and that extraction mines, having been exploited for decades, are closing due to the depletion of their resources.
  • At the same time, world demand continues to grow, and this is not only due to jewelers, but also to industry, which uses gold as a base material for the manufacture of various products and derived metals. Due to the industrialization of many countries, among which, the countries of Asia, the gold needs of the industry increase every year.
  • Finally, both private and institutional investors have always viewed gold as a safe haven. Consequently, banks’ gold reserves increase as risks in traditional financial markets increase.

If we analyze these different factors and their possibilities of evolution, we realize that the future of gold is already outlined. Indeed, it is clear that the upward phenomenon observed historically will be accentuated in the coming years.