Investments

A golden asset for uncertain times

A golden asset for uncertain times
Degussa Global Custodian explains why gold is the safest asset bet for tumultuous periods.

Few investment assets possess the enduring shine of physical gold. Having served as a store of value for millennia, gold retains its worth and does not depreciate over time. Its price stability and resilience for generations make it an indispensable choice for wealth preservation. It has functioned as an alternative medium of exchange, operating beyond the traditional banking system and universally recognised as a reliable means of trade.

Whether securely stored in multiple vaults or held in one’s possession, the portability of gold provides a reassuring hedge in the face of local political and economic uncertainties. While many investment allocations experience significant price downturns during global crises, including “safer” options like cash or bonds, gold prices tend to move in a different direction. Its demonstrated low or negative correlation with other major asset classes makes it a unique diversification tool in an investment portfolio, offering stability when other assets under perform.

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Furthermore, gold has a unique fusion of two contradictory qualities. Although physical gold is intrinsically scarce — all gol, ever mined, fits in a 23-meter sided cube — the global market for this precious metal is exceptionally liquid. Investors can easily buy and sell gold, thanks to an extensive worldwide network of buyers and sellers. This liquidity ensures the investors’ participation on trading it, while its limited supply protects its role as an effective hedge against inflation. As central banks persist in their money printing endeavours, gold's importance in wealth preservation becomes unbeatable.

Physical gold transcends generations and cultures. It appeals not only as an investment but also as symbol of divinity, beauty, power and prosperity. Unlike other metals, gold resists corrosion and oxidation. Gold coins and bars, even when recovered from deep shipwrecks under the ocean, exhibit remarkable durability and retain their lustre and value over centuries.

With its enduring and significant qualities as an asset, gold continues to shine brightly in the wealth holdings of families and dynasties throughout history.

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