Gold is popularly considered to be a hedge against inflation. It has a direct relation to inflation. During periods of inflation, investors fear that stocks and debt funds may underperform. However, gold has historically performed well during inflation.
One of the factors that makes gold a good investment is liquidity. Gold can easily be converted to cash whenever you want. Compared to other investments, gold is the only investment with high liquidity. Because gold is highly valued and its supply is very limited, it has long been used as a medium of exchange or money.
The first known use of gold in transactions dates back more than 6000 years. The first transactions were made with pieces of gold or silver. The rarity, utility, and convenience of gold make it a substance of long-term value. Gold works well for this purpose because it has a high value and is durable, portable and easily divisible.
It allows investors to take advantage of the rising price of gold without the need to store physical gold. However, once you decide to take advantage of the safe haven that only gold can offer, make sure you better understand gold investments before investing all your hard-earned money in them. That said, it's just as important to know the pros and cons of gold before making any decisions. The main financial advantage of gold is that it tends to be an effective way to provide you with additional protection against economic uncertainty and inflation.