Investing In Gold And Silver For Capital Preservation And Appreciation

Gold Is An Enduring Asset

As jewelry or house decoration, gold has been used since ancient times, being always perceived as a perfect means of storing and displaying wealth and power. At the beginning, gold coins were used only as precious presents, like, for instance, in the ancient Egypt. But some two thousand years later, during the reign of the Lydian King Croesus, their use became commercial. The enduring value of gold is proven by the fact we are still using the phrase 'rich as King Croesus'.


As jewelry or house decoration, gold has been used since ancient times, being always perceived as a perfect means of storing and displaying wealth and power. At the beginning, gold coins were used only as precious presents, like, for instance, in the ancient Egypt. But some two thousand years later, during the reign of the Lydian King Croesus, their use became commercial. The enduring value of gold is proven by the fact we are still using the phrase ‘rich as King Croesus’.

While back then gold coins were 100% pure, later kings decided to blend in some lead in order to have more currency. And so inflation was born from these lesser-value coins. And again the lasting value of gold has been proven by the fact that the states that preferred to increase their money supply by mixing gold with inferior metals lost their prosperity and status almost as soon as they did that. Spain, one of the most influential countries worldwide while using its ‘pieces of eight’, once it weakened its currency, it started to go down.

And the same happened in the US. When greenbacks were used during the civil wars, inflation was galloping. But as soon as the government ordered to convert them into gold, inflation began to lose its strength. Most states switched to the gold standard by 1914 for the same reason: the value of gold was considered stable, having resisted the sweeping changes brought by wars and the soaring inflation.

While, arguably, people’s fascination with gold is due to this three thousand-year long tradition in using gold for storing wealth, its value today is not arising only from that. Whereas Indians may well hoard gold jewelry like their predecessors, the rationale behind buying gold is different nowadays. Economic studies have demonstrated that, no matter the inflation or deflation, gold has maintained its purchasing power better than any known currency. Therefore, people invest in gold because it is a stable asset. And who doesn’t hate instability, especially when it comes to money?

While it is a sound investment strategy to sell your gold once in a while, to the extent you can make a profit (and you obviously can while its price is on the rise), it is as sound to keep gold for your protection some day, when whatever currency will become just a piece of paper.

Find out from specialists how buying gold can aid you in times of recession.

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