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QUESTIONS YOU MIGHT HAVE ON YOUR MIND
What is Gold Spot Price?
The spot price of gold is the most common standard used to gauge the going rate for a troy ounce of gold. The price is driven by speculation in the markets, currency values, current events, and many other factors.
Gold as an Investment?
Physical gold is available for investment in the form of bullion. Physical gold bullion is produced by many private and government mints both in the USA and worldwide. This option is most commonly found in bar, coin, and round form, with a vast number of sizes available for each.
Gold can range anywhere in size from one gram up to 400 ounces, with most coins found in one ounce and fractional sizes. Like other precious metals, physical gold is regarded by some as a good way to protect themselves against the ongoing devaluation of fiat currencies, or inflation, and from volatile stock markets.
As stated, prior, there are many factors that influence the price of gold but also its importance of inclusion within a client's asset portfolio. Financial diversification that gold provides is critical as it tends to inversely correlate with equities markets in particular. Perhaps most important to look at is the impact of gold pricing that results within an inflationary environment.
“A simple study of gold’s performance over the last 50 years would tend to support the theory of gold being a hedge when inflation is notably elevated, when it is significantly higher than any target set (implicitly or explicitly) by policymakers. According to a study by the World Gold Council and using data since 1971, gold has returned 15% per annum on average when inflation has been higher than 3%, compared to just over 6% per annum when inflation has been sub-3%.” Chris Mellor is head of Emea ETF, equity and commodity product management at Invesco
