Why invest in precious metals

Ever since the dawn of civilisation man has traded precious metals for other goods and services. Even now, gold plays important part of the global economy due to its unique nature of storing wealth as a “safe haven” against inflationary pressure. The global economic uncertainty in 2009 has helped to push gold prices to an all time high of $1,200. With ambiguity still surrounding the future of the Global economy and the dollar, this is leading to above average demand for gold as a store of value. Investing in specialist gold and precious metal funds may generate more returns than a typical equity-based investment.

Investing in gold and other precious metals also directly taps into the emerging market growth story. The biggest and most important consumer of gold in the current climate is India. India presently is undergoing a massive economic transformation and is the second fastest growing economy in the world; it is logical to assume that, as India becomes wealthier, its level of gold consumption will increase. Furthermore, the number of operational mines and levels of production are set to decline in the long-term, adding more support to the price. Investing in precious metals offers more potential of greater profits than a normal fund; however, this comes with an increased amount of risk and should only be considered for a period of (7-10) years


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