There are several main reasons why people invest in gold:
Have protection in case of inflation.
Diversify your investment portfolio.
For speculative gains based on the rise or fall of the price.
Protection against inflation is the main function of gold as an investment instrument. Even stable currencies, such as the US dollar, or the Japanese yen, depreciate over time. Bank deposits only partially offset inflation and certainly did not allow you to generate a decent income regal assets.
Over the years, gold has become more expensive, not only compared to fiat money, but also relative to most goods and services. Today, an ounce of gold can buy more wealth than it did 100 years ago. On the other hand, 100 years ago, $ 1,000 was a fortune. Today, it is below the normal salary of an average European country.
Diversifying an investment portfolio generally attracts the interest of experienced investors, although an advanced beginner may also acquire such protection against risks. When the portfolio is primarily made up of stocks or futures, gold will be the most stable and reliable asset. In periods of economic instability, when stock markets fall, the price of gold, by contrast, rises. The increase in the value of gold in the investment portfolio partially offset the losses caused by the fall in share prices.
Despite the fact that gold is considered a stable asset, in the short term its rate is quite volatile. This gives the investor the opportunity to earn money.
The variability in gold prices allows trader-speculators to make money. Unlike stock market shares, gold is available to trade 24 hours a day, five days a week. In the Forex market, gold is one of the most popular assets, mainly between the EUR / USD pair and some other highly relevant ones.