Finance

The Purchasing Power of Gold

What you are able to obtain with what you have is termed as ‘purchasing power’ it represents the amount of goods and services you can buy with a currency.

To preserve this purchasing power that you wield with the money you have currently requires you to hold on to a currency that does not lose value over time.

For example take the money you have saved over time and take the value of your first deposit into this saving account and the last deposit into this savings account and compare it with the purchasing power the first deposit had when you deposited it and the compare that same amount to what it is able to purchase today.

Is it the same? Surely you have lost the purchasing power. This is due to the fact that the value of paper currency has been on a continual decline over the past 60 years without fail.

What you should do to preserve your purchasing power is to hold currency that retains its value over long periods of time and you should also hold on to currency that is appreciating relative to most, if not all other currencies over both the short and long term.

History shows that buying gold and silver is the easiest way to preserve your purchasing power compared to any other available asset or commodity over time and during times of both growth and deflation.

Gold will never lose value but on the contrary will only increase in value as the demand for gold by the increasing population of the planet demands exceed the supply of gold.

In terms of managing your gold investment, there are a lot of ways to manage your profits. One tactic is to buy large and at times of a gold peak in price, sell the same amount of gold as you profited from, then when the value of gold falls again, purchase more, this ensures a small constant profit around two or three times a year, usually the return is higher than most savings accounts from banks.

Another method is the set and forget, simply purchase gold and then forget about it, while still ensuring to keep it secure in a heavy safe of 100kg weight. After 10 years check the price of gold and compare it to the time your purchased, if the gold has gone up enough to convince you it is worth selling, then sell and use it for something important where you actually need the money.

The third way is more risky, but it involves watching the markets and buying gold during a crash, usually this is during time of global economic growth, then hold the large amount of gold until there is a financial collapse, and then sell when it is at it’s worst. This ensures you receive a large profit on your investment.

For more information on making the most of your gold and silver items, visit the MGC Melbourne Pawnbroker site for full information.