Why buy gold?
Gold’s reputation as a safe-haven asset is well-established, and well-deserved.
Gold has always been a great investment (particularly in the last 20 years, which have seen the price of gold make an impressive drive from £176 per Troy ounce in 2000 to £1,220 in early 2020 – that’s 693%).
Historically, gold has proven itself as a safe-haven asset that steadily appreciates in value, consistently outperforming mainstream assets including traditional saving, stocks and share investment options – particularly during times of economic uncertainty and market volatility, during which the price of gold has accelerated most steeply.
And right now – amidst a global pandemic, shuttered economies, and political turmoil in both the UK and the US – is a time of economic uncertainty so unprecedented, that the word unprecedented was Merriam-Webter’s people’s choice for the word of the year.
Had you bought £1,000 bullion in 2002, by 2020 you would have seen six fold growth
| Year | Growth | Compounded |
| 2002 | 25.6% | £ 1,256 |
| 2003 | 19.9% | £ 1,506 |
| 2004 | 4.6% | £ 1,575 |
| 2005 | 17.8% | £ 1,856 |
| 2006 | 23.2% | £ 2,286 |
| 2007 | 31.9% | £ 3,015 |
| 2008 | 4.3% | £ 3,145 |
| 2009 | 25.0% | £ 3,931 |
| 2010 | 25.2% | £ 4,922 |
| 2011 | 8.9% | £ 5,360 |
| 2012 | 8.3% | £ 5,805 |
| 2013 | -27.3% | £ 4,220 |
| 2014 | 0.1% | £ 4,224 |
| 2015 | -12.1% | £ 3,713 |
| 2016 | 8.1% | £ 4,014 |
| 2017 | 12.7% | £ 4,524 |
| 2018 | 0.9% | £ 4,565 |
| 2019 | 18.4% | £ 5,404 |
| 2020 | 12.5% | £ 6,081 |
Gold Price Annual Growth
The Comparative Advantage of Gold vs. Other Mainstream Assets
Gold vs
Innate value linked to rarity and limited supply
Time-established hedge against inflation
Easily liquidated, no counterparty risk
Cash in Banks
No intrinsic value, unlimited supply
Subject to inflation and currency depreciation
Subject to counterparty risk and management fees
Gold vs
Easily and immediately liquidated
No minimum purchase
Holds value even during times of recession
Property
Entirely illiquid
High entry level
Values can fall and returns can shrink in times of economic uncertainty
Gold vs
Historically, a consistent store of value
Secure, safe-haven asset
A long-term store of wealth
Bitcoin
Extremely high volatility
Prey to hacking and other digital vulnerabilities
A high-risk opportunity to trade quickly and win or lose a fortune
Gold vs
Low volatility, secure store of wealth
The intrinsic rarity of gold ensures prices are aligned to value
Offers an effective hedge against market downturns, which impact most mainstream assets
Stocks, Shares, and Equities
High volatility and high risk
Quantitative easing has resulted in overvalued assets
An environment of lowered dividend yields and capital gains