Saving money in gold has historically emerged as one of the safest and most valuable assets, even more so than currencies. Amid global economic and financial volatility, many are seeking safe and effective ways to preserve and grow the value of their savings over the long term.
Can we consider gold a truly effective tool for saving money? And what are the best ways to do so? We'll find out the answer together in the following article.
Why gold?
Gold has characteristics that distinguish it from other metals, attracting people to it as a way to save and preserve their money. The most prominent reasons for this include:
- The price of gold tends to rise or maintain its value during periods of economic uncertainty, economic inflation, or geopolitical turmoil that affects currencies.
- Gold tends to maintain its purchasing power over the long term, unlike paper currencies, which can lose value due to inflation.
- Gold is recognized worldwide and can be traded easily almost anywhere. Its value is not tied to any particular currency or country's economy.
- Gold has been used for centuries as a store of wealth. Its quantities are limited and its extraction is costly, so it has intrinsic value.
- Gold is a tangible asset that you can physically own, giving you a sense of security and control, unlike stocks or bonds, which are just pieces of paper.
Which is better, saving money or gold?
The comparison between saving money (paper currency) and gold cannot be based on which is absolutely better, but rather on which is more appropriate for a specific purpose and circumstance. Each has its own advantages and disadvantages:
Saving money (paper currency):
Money savings are easy to access and spend, and their value is relatively stable in the short term. However, they lose their value due to inflation in the long term and are vulnerable to exchange rate fluctuations or economic crises that affect the currency's value.
Saving in gold:
Gold savings maintain their purchasing power over the long term, are not affected by inflation and economic crises, and are a globally valued safe haven. However, unlike cash savings, they are less liquid, requiring time to sell. They also require storage and security costs, and their price is likely to fluctuate in the short term.
Therefore, for short-term goals, emergency liquidity, and daily expenses, saving in cash is best. For long-term goals and to protect the value of savings against inflation, saving in gold is a definite and compelling choice.
The best types of gold for saving
When we talk about saving money in gold, we don't necessarily mean jewelry, but rather investment gold. Here are the differences between the two and the best options:
Gold bullion:
Gold bars come in various weights, from a few grams to kilograms, and are highly pure (24-karat), meaning they are 99.99% pure gold.
Gold bars are designed for savings purposes, so their manufacturing costs are much lower than jewelry. The heavier the bar, the lower the cost.
Gold coins:
Such as British or Egyptian gold pounds , or other famous international currencies such as the Krugerrand or Canadian Maple Leaf. The purity of gold coins is 24 karats or slightly less, such as the British pound, which is 22 karats.
These coins are globally valued and easy to trade. Some hold additional value as coins or historical pieces, but their primary value is derived from the weight of gold they contain. Their manufacturing costs are slightly higher than gold bullion, but they are a great option for starting to save small amounts.
Gold jewelry:
The value of gold jewelry is not based solely on the weight of the gold, but also includes the design value, the precious stones it contains, and, most importantly, the very high manufacturing cost.
The purity of the gold in these bars and coins is typically lower than that of 14, 18, or 21 karat gold bars. When you sell them as raw gold, you lose the entire manufacturing cost and will be valued at a lower price than pure gold.
Therefore, jewelry is not the ideal choice for saving, but it is ideal for collecting and adorning while retaining the value of a portion of its price.
Conclusion: For savings and investment purposes, gold bars and coins are the best choice due to their high purity and relatively low manufacturing costs.
When you want to buy gold for savings and to preserve the value of your money, gold bars and gold coins are the ideal choice due to their high purity and low manufacturing costs.