Investment gold

The more central banks put money into circulation, the more their value decreases.  However, gold remains untouched by government monetary policy. If paper money loses its value, the owners of physical gold do not lose their property.

Gold as a means of payment has been in existence for more than 6,000 years; the first gold coins began to be minted around 700 BC. You could buy a Ford Lizzy for 42.5 oz of gold in 1909 ($ 800 at that time). A Ford Galaxy cost also 42.5 oz of gold in 2017, but at around $ 54,400. The amount of gold to buy did not change, but the amount of money did.

As we know from history, the demand for gold and its price increases whenever the economy is in crisis and the currencies lose their purchasing power. Paper money has never survived. In case of German monetary history, the euro is the fifth currency since the founding of the empire in 1871.

Gold reserves and mining are limited. Its total, not yet mined amount is estimated at around 45,000 tonnes. It will be exhausted in about 15 years with the current annual production volume.

Approximately three thousand tonnes of gold are extracted annually, with the current demand being approximately four thousand tonnes. The world’s largest gold producer (and consumer at the same time) has been China since 2013.  

Private investment institutions recommend securing at least 25% of assets with physical gold. Thus, property managers often buy investment gold to secure a portion of the portfolio of their rich clients. Similarly, some national central banks, which store gold as their currency reserves, do so as well.