Why buy gold?

[Guest cherzeca]

if you compare GLD to SPY over the past 15 years or so, you will see that one outperforms the other depending upon equity market performance generally...unsurprisingly.  so if you think the market will tank sometime in the next year or so, buying GLD makes sense.  but if you don't think so, or like me you dont have any strong conviction one way or another, I think GLD as a hedge only, as opposed to a sizable investment allocation, makes sense.  I think you have to be a pure empiricist about this and not get bogged down in MMT theory or helicopter money analogies, fwiw

[Maximu]

The value of gold has a few other drivers that I have not yet seen mentioned, including (1) gold is a very compact, lightweight store of value that can be easily hidden and transported.  There are several practical applications of this including illicit transactions, smuggling value out of currency controlled economies, and fleeing in wartime when  government currencies are worthless.  Ignoring the illegal usefulness, gold does have a real value as insurance in the event of an existential calamity that renders traditional investment and currency inaccessible.  (2) Political... if others want their  currency to compete with or supplant the US dollar as the world's reserve currency, then the challenger needs to convince future consumers of its currency that it is a strong, secure alternative ... one way to do this is increase the amount of gold backing the currency.  This may explain the buying by China and Russia, though given the absence of legal or political systems which are likely to be equitable to foreigners in the event of disputes,  no amount of gold is likely to help.  Another scenario is ... just as gold provides insurance to individuals fleeing wartime when govt currency is useless, gold accumulated by governments may become useful if the world economic system experiences a serious disruption... gold can be used as a medium of exchange to keep things moving.

[good-investing]

Maybe you can also find some good answers why and how to buy gold in our interview with Caesar Bryan:

[Guest]

Maybe this interview gives some insight on the question: Why buy gold?

 

All for the low, low price price of 1.55% (plus a load!).

 

He has so much conviction in his strategy that he has less than $500,000 in the fund that he's been managing for 25 years!