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Is gold a good investment? Show more Show less
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Is gold a good investment? Will it lead to capital preservation and help and investor realize a return on investment? The question is polarizing, with some investors known as "gold bugs" being obsessed by it and others being completely dismissive of gold as an investment.

Yes. Gold is a great investment Show more Show less

Gold can preserve value for an investor in the face of inflation.
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Gold is stable, durable and malleable, and will outlast all other currencies

Gold does not dissipate into the atmosphere, it does not burst into flames, and it does not poison or irradiate the holder. It is rare enough to make it difficult to overproduce and malleable to mint into coins, bars, and bricks. Civilizations have consistently used gold as a material of value.

The Argument

In many civilizations and societies, gold has been passed down for generations and centuries. In eastern countries such as India, thousand-year-old pieces of gold jewelry have transferred hands from mother to daughter. In many ancient empires such as the Persian, Greek, and Roman empires, gold was minted into thin coins and, throughout several centuries, the value of gold and the value of money was preserved. The unique property that made all of these occurrences possible is that gold is malleable, durable, and long-lasting. Gold is a trustworthy investment because it is highly durable and it does not tarnish. Gold does not react with oxygen or any other gases present in the atmosphere. It is a non-reactive metal and it will never tarnish nor rust under any circumstances. [1] It is highly ductile and malleable meaning it can be heated and melted over a common flame. Carving it into small coins or jewelry or any object for the ease of preservation is quite easy. The use of gold as a durable investment is evidenced by the practices of many economies. For centuries, if not millenniums, countries and empires had the gold standard set in place. The gold standard is when the values of different currencies are defined by their amount in gold. [2] Countries bought and traded gold at fixed prices. Until WWI, many countries including England, America, and Germany, practiced this standard. Besides fixing many economic problems such as inflation, it ensured governments that their investment will never corrode away. It is the most reliable metal to invest in as it is protected against the very forces of nature.

Counter arguments

There is no argument regarding the durability and sustainability of gold as a metal. However, the amount of time that a family or country can protect its gold reserves is highly questionable. To put it simply, gold is a precious commodity that is prone to be stolen. Even though the metal is long-lasting, people might not be able to carefully preserve it within homes and safes away from the hands of thieves. Some of the most prominent examples of this are the Summer Bliss Robbery in 2012 where 216 kgs of gold bars were stolen and the 1983 Brink’s-Mat Robbery when 3 tons of gold bars were stolen. [3] All of these prove that even with the most advanced technology and security measures, gold is easily subject to many criminal speculations. It might be a long-lasting metal but it might not exactly be long-lasting as an investment for the holder.

Proponents

Premises

Rejecting the premises

References

  1. https://www.investopedia.com/articles/basics/08/reasons-to-own-gold.asp#:~:text=Although%20the%20price%20of%20gold,an%20investment%20well%20worth%20considering./source.html
  2. https://www.investopedia.com/ask/answers/09/gold-standard.asp/source.html
  3. https://coinweek.com/people-in-the-news/crime-and-fraud/the-biggest-gold-heists-of-all-time-part-ii/source.html
This page was last edited on Monday, 27 Jul 2020 at 14:26 UTC

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