We all want to make our money work for us, but buying gold is not always the best investment. Before buying gold, there are several things you need to consider.
Before buying any jewelry or coins made of gold—anywhere in the world—it's important that you know what you're buying and where it comes from. Not only because you don't want to get ripped off, but also because it could be bad for your health if you unknowingly buy something tainted with toxic substances like lead or cadmium.
Gold Prices Are High Right Now
Gold prices fluctuate rapidly based on market forces, so make sure that when you buy gold today, tomorrow (or next week) you're buying at the right price. The price of gold is even more variable than most other commodities, which can make buying gold an extremely risky investment. You can find about some cool gold and crypto IRA investing at goldhedge.us.
Gold Has No Intrinsic Value - Gold Isn't Practical
Gold does not have any practical function, unlike food or energy sources. For example, you can eat some food to live, but anything made of pure gold would be useless as it's so soft you could mold it with your hands. You can't burn it for fuel either, so there is no way to extract the value from it other than buying and selling it on the market like any fiat currency (which is also backed by nothing).
Not All Gold Is Created Equal
Just because something contains gold doesn't mean it's worth buying. For example, an ornate gold ring is far more expensive than a simple plain one even if they're both made of the same amount of pure gold. It would be wise to know exactly what you're buying and where it comes from before buying anything.
You Can't Just Eat Your Gold
One unfortunate fact about buying and selling so much gold these days is that many countries have had to increase their production of gold, which has led to serious consequences on the environment due to mining. Plus, buying too much gold could cause speculative bubbles in commodity markets as less people buy things like corn or wheat because they'd rather invest in something that doesn't breed or grow (which makes them bad investments).
Gold Is Not Very Portable
Gold is heavy. For example, a gold bar that weighs 100 troy ounces would be too large and heavy for one person to carry around. In addition to being inconvenient, moving large amounts of gold can also be dangerous as people may try to steal it from you or know where your buying/selling it from which could put you at risk of being robbed.
Gold Is Not Very Divisible or Convenient to Store
While buying a gold bar is easy enough, buying less than a full ounce of gold isn't practical because the price changes so drastically depending on how much pure gold a product contains. If you want to buy or sell smaller quantities of gold, then numismatic coins are best as they're collectible items that contain a small fraction of pure gold. Numismatic coins are bought and sold much like stocks in which people buy
them simply because they think their value will rise when buying/selling them in bulk, not necessarily for the metal content alone.
Lack Of Liquidity
Unlike buying a stock or bond that can be quickly turned into cash at any time, buying physical gold means you're going to have to wait until someone else wants to buy it from you. This is extremely inefficient if you need money right away even if it's just for buying food since you'd have to get rid of it eventually anyway (which would force you to sell your gold at a lower price than what you originally paid for).
Gold Isn't Practical For Large Transactions
While buying gold is an easy process, buying and selling tonnes of it isn't practical because you'd need to get so many different people involved who would all take a cut along the way. You can avoid this problem by buying shares in large gold companies that buy and sell gold, but then you run into other problems like how these companies are still at risk of bankruptcy (but for larger companies, the risk is much lower).
This Is A Risky Investment
Unless you live in a country that already backs its currency with physical gold or silver, buying any gold could be seen as risky since there's no guarantee your money will be worth anything tomorrow (or even next week). If buying digital currencies like Bitcoin sounds better to you (which is backed by cryptography), then buying gold could be seen as riskier since many people believe that digital currencies like Bitcoin are the future.
It's All About Perspective
While buying gold is no longer an option if you want to protect yourself against inflation (and if you have enough money, buying a small amount is also pointless), it's not an investment everyone can afford due to its high up-front costs which makes buying shares in companies more practical even though they're still risky.
Buying gold has lots of benefits, but buying physical gold isn't always the best choice for everyone since buying and selling it is so impractical unless you have the right connections or buy stocks instead. If buying GOLD would be useful to you, then buying shares in a gold company instead is probably going to be a better choice because buying the physical commodity itself involves too many risks for smaller investors.