Chances are you may know little about gold or you view gold as a shiny metal that only older generations see value in.
In an increasingly digital world, you may question what value gold has today and why HelloGold is making it a priority for Malaysians to save in gold.
Why should I own gold?
Many Malaysians don’t have access to the full range of financial products available in Malaysia and around the world- even more importantly, many can’t afford them. On the other hand, gold is both affordable and accessible and has become the answer to those looking to diversify their portfolios and manage their risk.
Gold’s true value lies in the fact that it’s a natural hedge against inflation, currency risk and unforeseen circumstances in the financial markets. It’s recognized globally and holds intrinsic value, meaning gold is valuable no matter where you are.
The demand for gold to come
“Ok, but how can I be sure gold will still be in demand in the future?”
Good question. You don’t have to be a financial expert to have a good sense of where gold is headed when you consider the following:
- India and China alone make up 50% of the annual demand for gold.
These two economies have seen much rapid growth and industrialization in the past two decades. Most experts believe that these two countries will continue to prosper and grow in the short, medium and long term.
There is good reason to believe that the Chinese and Indians will continue to buy gold as their respective countries become richer.
For those who rise above the poverty line, they finally have something to save in and that’s gold. Oftentimes many buy gold because they can carry their wealth with them in the form of gold coins, chains and rings as they can easily be sold into cash when needed.
- The demand for gold has continued to grow
In a stable economy, gold tends to operate on an asymmetric basis. This means it doesn’t necessarily perform significantly better or worse when market conditions are good – it behaves according to the beat of its own drum.
On the other hand, if you believe the global economy is going to be less stable, you’ll find other asset classes taking a downturn. Gold price history shows that gold tends to be negatively correlated to other asset classes in times of extreme market stress. When this happens, you can be fairly certain that gold will rise in value.
- If you believe that the world is in a better place politically, gold will likely continue to grow in demand.
However, if you believe that the global political climate is more unstable, then an increase gold demand is more likely because gold is considered a safe haven for everyone. In times of political instability, many flock to gold in fear of the failing dollar.
In fact, since the financial crisis of 2008, central banks and sovereign wealth funds have been strategically buying and storing gold. As previously stated, large emerging economies such as India and China are also stocking up their gold reserves, and for good reason!
As one of the earliest financial assets, gold has proven throughout the ages to be a reliable and stable asset globally in good times and in bad.
So why do people still buy gold? Because for the longest time in history, the only thing that has held its weight in gold is gold itself.