Have you ever heard elders say, "Buying gold is a way to secure your wealth"? While investing in stocks or real estate might seem more lucrative, many older individuals remain steadfast in their commitment to gold.
Investing in Gold, Yes or No?
After purchasing gold, it's common for these elders to store it away in bank safety deposit boxes, incurring annual management fees. At first glance, this may seem counterproductive. However, decades later, even if the gold remains the same physical piece, its value can grow significantly, allowing it to be exchanged for much more cash. This enduring appeal of gold is indeed captivating.
In fact, this year, the biggest gains haven't come from stocks or bonds but from gold! The S&P 500 index rose by 23%, while long-term government bonds declined by 5%, yet gold soared by an impressive 31%.
The Three Key Drivers Behind Gold's Rise
1. Escalating Geopolitical Conflicts
When global stability is threatened, gold often becomes a safe haven for investments. Recent events, such as the war in Ukraine and tensions between Israel and Iran, have increased geopolitical risks. Unlike stocks or bonds, which can be heavily influenced by a single economic system, gold retains its value across various scenarios. This makes it an attractive option for those looking to safeguard their assets during uncertain times.
2. Rising Government Debt Levels
As government debt levels climb, confidence in currencies like the US dollar is beginning to wane. People are becoming increasingly wary of relying solely on government-backed money. In contrast, gold is not dependent on any government's creditworthiness; its value remains resilient, regardless of national debt crises. This inherent stability has led many central banks around the world to increase their gold reserves as a buffer against economic volatility.
3. Long-Term Appreciation Potential
Over the past 50 years, gold prices have increased more than fourteen-fold. While this may seem modest compared to stocks, which have risen 186 times, or US Treasury bonds, which have appreciated 25 times, gold's unique characteristic is its negative correlation with other assets. This quality allows gold to act as a stabilizing force in an investment portfolio, reducing risks associated with economic cycles. For many, gold represents a crucial component of asset allocation strategies, particularly during turbulent economic periods.
The Psychological Factor
Beyond the financial aspects, there is also a psychological dimension to gold investment. For many elders, gold symbolizes stability and security. It often carries cultural significance, being associated with wealth, heritage, and legacy. This deep-rooted belief in gold as a tangible asset—something one can physically hold—adds to its allure. In uncertain economic climates, gold acts as a reassuring reminder of wealth that transcends mere numbers on a bank statement.
Investing Gold
Investing in gold can be done through exchange-traded funds (ETFs) or gold mining companies. Here are some options:
Gold ETFs
1. SPDR Gold Shares (GLD) $SPDR Gold Shares(GLD)$
2. iShares Gold Trust (IAU) $iShares Gold Trust(IAU)$
3. Aberdeen Standard Physical Gold Shares ETF (SGOL) $abrdn Physical Gold Shares ETF(SGOL)$ : This fund also holds physical gold and is backed by actual bullion.
Gold Mining Companies
1. Barrick Gold Corporation (GOLD) $Barrick Gold Corp(GOLD)$
2. Newmont Corporation (NEM) $Newmont Mining(NEM)$
3. Franco-Nevada Corporation (FNV): A royalty and streaming company that provides exposure to gold without the operational risks of mining.
Gold mining
Conclusion: To Invest or Not?
Given these compelling reasons, it's no wonder that many elders are drawn to gold as a means of protecting their wealth. Its resilience during times of crisis, independence from governmental influences, and long-term value appreciation make it a favored choice.
Gold investment
So, would you consider joining them in investing in gold? Whether as a hedge against uncertainty or a long-term wealth strategy, gold continues to hold its ground as a valuable asset. As the financial landscape evolves, the question remains: will gold maintain its status as a reliable investment in the future?
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Comments
Shyon, thank you so much for sharing your insights on gold investment ETFs and the reasons behind rise in gold prices! 📈💰
I gonna add these ETFs in my watchlist and buy some gold when price is favorable!🏅
Analysis of Barrick Gold Corporation (GOLD)
Business and Industry Overview
Barrick Gold Corporation is one of the largest gold mining companies in the world, operating in multiple countries. As a leading gold producer, Barrick Gold is known for its diversified portfolio of assets.
The gold mining industry plays an important role in the global economy, as gold is considered a store of value and a safe haven investment during times of economic uncertainty. The demand for gold is driven by various factors such as jewelry, technology, central bank reserves, and investment purposes.
Earnings and Forecast
The earnings forecast for Barrick Gold Corporation is as follows:
2024FY: Forecast EPS of $1.28(USD), forecast gross income of $13.10 billion(USD), and forecasting EBIT of $4.59 billion(USD).
2025FY: Forecast EPS of $1.79(USD), forecast gross income of $15.69 billion(USD), and forecasting EBIT of $6.90 billion(USD).
2026FY: Forecast EPS of $1.71(USD), forecast gross income of $16.45 billion(USD), and forecasting EBIT of $6.29 billion(USD).
Recent Trends and Support/Resistance Price
The recent support and resistance prices for Barrick Gold Corporation are as follows:
Support price as of 2024-10-18: $20.45(USD)
Resistance price as of 2024-10-18: $20.93(USD)
Analyst Recommendations and Target Price
Analysts have provided the following recommendations for Barrick Gold Corporation:
6 recommend
8 buy
4 hold
The median target price estimated by analysts is $24.30563(USD), with a low target of $21.7691(USD) and a high target of $28.0(USD).
Capital Flow and Profitability
The capital flow data for the stock of Barrick Gold Corporation over the past 5 days is as follows:
10-11: Small outflow of 2134.83 units (Yuan)
10-14: Small inflow of 704.2 units (Yuan)
10-15: Small inflow of 5328.62 units (Yuan)
10-16: Small outflow of 14843.99 units (Yuan)
10-17: Small outflow of 3669.77 units (Yuan)
The profiteer ratio as of 2024-10-18 is 0.9791.
Conclusion
Barrick Gold Corporation has a strong presence in the gold mining industry and operates in multiple countries. The company has a positive earnings forecast, with expected growth in EPS, gross income, and EBIT over the next few years. Analysts have a generally positive outlook on the stock, with a majority recommending buying or holding the stock.
Please note that the above analysis is for informational purposes only and should not be considered as investment advice. Investing in stocks comes with inherent risks, and it is important to conduct further research and analysis before making any investment decisions.
Analysis of Newmont Corporation (NEM)
Business and Industry Overview
Newmont Corporation is a leading gold producer, known for its diversified portfolio of assets. The company operates in the gold mining industry, which plays a significant role in the global economy. Gold is considered a safe haven investment and is in demand for various purposes, including jewelry, technology, and central bank reserves.
Earnings and Forecast
The earnings forecast for Newmont Corporation is as follows:
2024FY: Forecast EPS of $3.07(USD), forecast gross income of $18.01 billion(USD), and forecasting EBIT of $5.23 billion(USD).
2025FY: Forecast EPS of $3.85(USD), forecast gross income of $19.63 billion(USD), and forecasting EBIT of $7.21 billion(USD).
2026FY: Forecast EPS of $4.11(USD), forecast gross income of $19.89 billion(USD), and forecasting EBIT of $7.15 billion(USD).
Recent Trends and Support/Resistance Price
The recent support and resistance prices for Newmont Corporation are as follows:
Support price as of 2024-10-18: $53.97(USD)
Resistance price as of 2024-10-18: $57.67(USD)
Analyst Recommendations and Target Price
Analysts have provided the following recommendations for Newmont Corporation:
6 recommend
10 buy
5 hold
The median target price estimated by analysts is $60.3513(USD), with a low target of $47.0(USD) and a high target of $80.0(USD).
Capital Flow and Profitability
The capital flow data for the stock of Newmont Corporation over the past 5 days is as follows:
10-11: Inflow of 15553.02 units (K)
10-14: Inflow of 7160.5 units (K)
10-15: Outflow of 2472.11 units (K)
10-16: Inflow of 15292.52 units (K)
10-17: Outflow of 2237.27 units (K)
The profiteer ratio as of 2024-10-18 is 0.998.
Conclusion
Newmont Corporation is a leading player in the gold mining industry, with a diversified portfolio of assets. The company has a positive earnings forecast, with expected growth in EPS, gross income, and EBIT over the next few years. Analysts have a generally positive outlook on the stock, with a majority recommending buying or holding the stock.
Please note that the above analysis is for informational purposes only and should not be considered as investment advice. Investing in stocks comes with inherent risks, and it is important to conduct further research and analysis before making any investment decisions.
Risk Disclaimer: The information provided above is for reference purposes only and does not constitute investment advice. Investing in stocks carries risks, including the potential loss of capital. Before making any investment decisions, it is important to conduct thorough research and seek advice from a qualified financial professional.