Cash and gold—two tangible assets you can hold in your hand and know that they mean something. Is one asset more powerful and longer-lasting? Learn why it might be a good idea to turn some of your cash into gold and how to do it.
Why Turn Your Cash into Gold?
When it comes down to paper money versus gold, there’s a treasure chest of reasons to consider converting a portion of your cash into precious metals. Here are four of them.
1. Gold might be better than cash at preserving wealth over the long term.
Gold, however, has long been seen as an excellent way to hold something meaningful and diverse over the long run. It’s earned a reputation as a safe haven from volatile asset categories.
Compared with the stock market, where even the biggest blue-chip companies can and have failed, buying gold “often seems less risky,” Adam Vettese, market analyst at investment platform eToro, told CNBC.
2. Gold can boost stability in a cash-heavy portfolio.
Over the long term, gold has proven to be a sought-after medium of exchange.
For nearly a half-century, the U.S. has operated with entirely paper-based currency. Gold, however, has been a global form of currency for more than 5,000 years. King Croesus of Lydia (modern-day Turkey) ordered the first gold coins to be struck around 550 B.C.!
“What people look for is something that’s an insurance policy, an asset that holds its value in times of trouble,” says Avinash Persaud, a senior fellow at the Peterson Institute for International Economics. “You don’t want uncertain reserve assets.”
Whereas cash might be an uncertain asset, gold could be viewed as anything but uncertain, given its longevity.
3. Gold is not a fiat currency like the dollar or euro.
Government-issued currencies circulating through the world’s economies are known as fiat currencies. A fiat currency gains its value from the government that produces it. A nation’s central bank can greatly affect the value of its currency through policies, regulations, and by printing more of it. By contrast, a nation’s central bank cannot tinker directly with gold’s trading price (but they sure can buy a lot of gold).
Because of gold’s relative rarity, its market value has been supported over time. Gold enjoys a long track record of purchasing power.
4. Gold is considered a good hedge against inflation.
Inflation, the rising cost of goods and services, can decrease the value of paper money.
“High inflation decreases purchasing power and undermines the value of money. Low inflation, however, suggests a dramatic collapse in the price of goods, which restricts spending and could trigger deflation and a broader recession,” writes John Rothans, Chief Procurement Officer at U.S. Money Reserve.
Inflation has not, however, had the same detrimental effect on gold. Compared with financial assets, gold is a “real” asset that lacks credit or default risks, and the yellow metal is actually lifted by high inflation, according to the World Gold Council.
How to Turn Your Cash Into Gold
It’s not difficult to buy gold. It might be difficult, though, to figure out where to directly convert your cash into gold. What follows is some information that can help with this decision.
One path you can take is buying gold at a local store. Advantages include being able to touch the gold and carry it out of the store once you’ve purchased it.
But buying gold locally can come with potential disadvantages. For instance, you might wind up paying a hefty price because you’re supporting the brick-and-mortar overhead of a gold dealer. You also might be hit with local sales taxes or find a limited selection.
Or you could choose to buy gold online or over the phone from a precious metals company like U.S. Money Reserve. Benefits include the ability to:
- shop when it’s convenient for you,
- speak with knowledgeable Account Executives,
- shop in private from the comfort of your home,
- browse a broad (and sometimes exclusive) inventory of gold coins and bars.
At U.S. Money Reserve, we also offer multiple ways for you to purchase physical gold, whether through a credit card payment or a bank wire.
Whichever route you pick to convert a portion of your cash into gold, do your homework. Search the Internet to ensure that the seller is legitimate, check out the seller’s online reviews, and look for ratings from nonprofit consumer groups like Business Consumer Alliance.
Take the next step in moving cash into gold. Call U.S. Money Reserve to learn more about our inventory of gold coins and bars.