Ever since humans first glimpsed the glittering yellow light of gold they have wanted to posses it.. The soft, precious metal has driven rushes and wars and been the economic standard for nearly every major civilization in history. Even in 2019, with all our technology and products, gold remains a staple not only of modern economies but of those vital technologies. After a lackluster showing in 2018, gold is set to rise to a five-year high in 2019.
If you’re interested in investing in gold, here are some reasons why that’s always a safe option, and a few reasons why 2019 will be good as gold.
Everybody Loves Shiny
There’s a reason so many cultures adapted gold as a currency for so long: gold needs to be out of the ground to be useful, and there’s only so much of it out there. It’s estimated that the total amount of gold out in the world is 190,000 metric tons and the total amount still in the Earth is a lot less: 52,000 tons.
Humans have been using gold as a currency since around 600 BCE and the Ancient Egyptians used it for jewellery as far back as 3000 BCE. You’ve probably heard of the gold standard: this was a law in the United States in the 17th century stating every paper dollar had to be backed by a piece of real gold. Obviously this is no longer the case, but the allure of gold as a symbol of wealth is alive and well. There are many who believe investing in gold is “safe” though this is only partially true: the market value of gold changes just like any other commodity.
The jewellery industry made an obscene US$ 316 billion in 2016 and is the driving force behind the demand for gold.
It Powers Our Lives
While gold’s actual practical use was minimal for most of its lifetime as a valued part of human society, the modern era has found a new use for gold in the form of its conductive properties. While only 10% of the world’s gold is used in electronics, that still represents billions of dollars. Each cellphone has only 50mg of gold in it, but there are billions of cellphones made every year. In short, 10% of a lot is still a lot!
Similar to the demand for ethical cobalt, the demand for gold in electronics is not going to diminish.
Gold Is A Safe Counter To A Chaotic Economy
As the dollar weakens, investor flock to gold as a bulwark against the falling dollar. This is expected to be a major facotr in the rise of gold prices in 2019, as the isolationist policies of the US government put a strain on the economy and the law of diminishing returns affect the benefits of the 2018 tax breaks. In fact, we’re already starting to see this happen as the price of gold rose steadily from a low in August through the end of 2018.
Gold has always been strong against inflation, as the price tends to stick close to the standard of living. Gold is often called a “crisis commodity” as investors flock to it in times of low confidence in government. Due to this, gold is a safe bet in a diversified portfolio as a balancing factor: up when stocks are down, down when stocks are up.
If You Want It, You Have To Go Get It
All the above is well and good for the gold that is already out of the ground, but what about the rest of it? Is all that subterranean gold a literal gold mine?
Renforth Resources thinks so. Located in the heart of Canada’s gold country, with 5 gold projects–2 of which have surface resources–Renforth describes themselves as “the little fish, doing boots on the ground exploration aggressively, adding value on hallowed ground that has not been seriously explored in > 75 years, with the big fish watching closely.”
Due to the above unstable economic factors, physical gold demand far outweighs mine supply. Doesn’t it make sense to invest in a company with an approached combined resource of 1 million ounces? As market instability drives the demand for gold in the increasing war of tariffs between China and the US, companies like Renforth are poised to be your own bulwark against falling stock prices.
(Note: In this article we mention Renforth Resources. Renforth Resources is a client of TrendScan and members of the TrendScan team own options to stock in Renforth Resources.)