Why Invest In Bullion

Why Invest In Bullion

Opportunity to invest in the short and long term

  • Throughout history gold and silver has always been the most traded commodities on the global market. The reason for this popularity is because they can provide constant opportunities for traders to profit in the short and long term due to frequent volatility of prices influenced by factors such as government policies, currency valuations and economic performance. The flexibility to invest either in short or long makes precious metals a sure winner with investors.

Safeguarding your wealth

  • Nevertheless precious metals can still be considered as a risky investment because they don’t tend to typically move with market prices for example when markets move one way precious metals tend to perform the opposite. Therefore investors often turn to precious metals as a means to safeguard their wealth against suchtimes of economic crisis, financial fluctuations and social or political upheaval. An example to show how gold has held or surpassed its value was the bear market of the 2007-2009 recession where during this time although the S&P 500 index fell 36% the price of gold rose 25%. Gold’s ability to uphold itself at times of turmoil has given gold the name as a safe haven asset as it seemingly acts like a safety net to market volatility.

Hedge against inflation and deflation

  • Investors most always include precious metals in their portfolio in order to hedge against inflation or deflation. This is when the money supply in an economy increases (inflation) or decreases (deflation) causing serious effects on the economy and one’s wealth. For this reason investors must find ways to preserve or even try to increase their wealth during these uncertain times. An example to show how gold has successfully hedged against inflation is back in the mid 1940s when the Bretton Woods system, which was universally acknowledged, set the price of an ounce of gold at $35 US dollars. Fast forward to today (March 2020) an ounce of gold has increased to approximately $1620 US dollars whereas the fiat currency has remained the same value. This example shows the strong purchasing power of gold over currency and the effectiveness of precious metals in helping protect your wealth.

Tangible Asset

  • Generally physical gold or silver in the form of bars and coins can be found in most investors portfolio. Unlike with other investments, you can choose to have physical ownership of gold and silver rather than owning it only in paper or electronic form. More so, compared to other tangible assets i.e real estate bullion is much easier and faster to purchase which is why it continues to be one of the most popular asset to own. Another benefit to gold and silver being a tangible asset is that it is extremely durable and requires little or no maintenance unlike other investments which would require high brokerage fees, allows for only limited control and would be susceptible to cyber-attacks such as online hacking. Therefore it would make sense to diversify wealth outside of digital form and in this case into physical precious metals.


  • A successful investment portfolio would include assets that would have little correlation to each other in order to reduce any risks or volatility. Therefore it is important to diversify, and not hold assets within the same asset class. Precious metals have always been perceived as an ‘investment insurance’ to investors where, as previously mentioned, gold tends to perform the opposite to the typical asset classes. So it is not surprising to know investors often include physical precious metals when diversifying to protect against macroeconomic factors.
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