Gold has a history of thousands and thousands of years. Around 1500 BC, the ancient empire of Egypt made gold the first official medium of exchange for international trade. Gold has been proven to be a great investment and store of value against inflation. But given the uncertainty of the COVID-19 pandemic, is it a good time to buy gold now?

First, this is NOT a financial advice, this article is purely for discussion purposes. You should contact your financial advisor for personal financial advice that suits your risk appetite. We will not be liable or will take credit for any investment decision that you make.

We know that we will be “a little bit” bias but here are a few reasons why we think gold will be a great investment, especially in this recession.

Gold tend to perform well in crisis

Looking back at the last crisis (the Global Financial Crisis), the gold price went from a low of 786.25 USD/Oz to a high of 1,776.4 USD/Oz.

Gold price chart

That is more than 100% gain on your investment. Now, given that most stocks crashed and a lot companies got wiped out during this period, an 100% + return on your investment was exceptional.

Devaluation of the Dollars (Inflation)

This is the thing that we have to deal with every year but in a financial crisis, it’s more likely that the money in your bank is going to be less valuable. Why? shouldn’t it worth more since no one is making money?

Even though a lot of people will lose their job but in a recession, the government often do a thing called “quantitative easing”. Basically, they will print more money and use this money to buy back the Australian government bond, which is Australian government debt.

This means that more Australian dollars will be in circulation and this will effectively devalue the Australian dollars. Why? Just imagine you have a special apple and there are only 5 apples like yours in the universe. Your apple will worth A LOT of money since it is quite special. But what if there are 100 apples like yours? Well then your apple will be worth a little bit less because it is less special now.

The same principle apply with money. The more money in circulation, the less valuable it is going to be. It sort of like: “If everyone is special, then no one is special”.

Now, what is it mean for Gold price? If the dollars go down in value, it is also mean that Gold will be worth more. Just think about it, you have 2 assets with the same value being Gold and Dollars. If one asset goes down in value, in this case being the Dollars, the other asset (being Gold) will be more valuable. Especially, when you using the Dollars to buy Gold.

Wrapping it up

Recently, RBA (The Reserve Bank of Australia) announced that they will continue to pump $100 billion more into the economy. And as explained above, this will substantially devalue the Dollars and potentially will drive the Gold price up even more. That’s why we think that it is a great time to invest in Gold now and protect yourself against inflation.

So if you are looking to buy Gold, check out our gold purchasing platform First Gold

FirstGold is a new gold and silver savings initiative from the innovative Gold Company that puts your financial future back in your hands. It’s the way to accumulate physical bullion with your paper money and create real wealth, while still giving you the instant account management, flexibility and freedom you need.

FirstGold accumulation platform caters to an increased interest in customers looking for a simpler, smarter way to buy real gold and silver, FirstGold is Australia’s online gold and silver accumulation option.

By eliminating the complexities associated with buying bullion, FirstGold enables you to create long-term savings in real bullion which is real money.

Or alternatively, if you need some quick cash, we also offer to buy your gold or any other precious metals that you might have.


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