2022 was a very volatile year for the global economy, and the outlook for 2024 is not hugely optimistic either.
Years of accumulated government support, from quantitative easing post the Global Financial Crisis to bailouts and pandemic handouts, have flooded the economy with money and caused a major inflation crisis.
The Russia/Ukraine war compounded the issue, leading to economic contractions, recessions and substantial volatility in the markets.
The outlook for 2024 is very subdued. Inflation is not yet under control, the UK may swerve a recession but any growth is expected to be very muted, the property market is on a downward trajectory and the markets are extremely uncertain. In this environment, gold comes into its own – as a safe-haven asset that tends to increase when other assets are declining, and as a relative hedge against inflation. There will be many opportunities to invest in undervalued assets when the markets bottom out, and gold is more likely to hold its own or increase in the current climate while any liquidity held in cash will immediately lose value.
A historic global currency
Gold’s rarity and immutability are the key reasons behind its abiding value. It is estimated that over 200,000 tonnes of gold has been mined throughout all human history, which sounds like a lot but would actually only fill between three and four Olympic swimming pools when melted down. The World Gold Council estimates there are only around 50,000 tonnes of proven reserves left in the ground.
This rarity underpins its value, and gold has been traded as a form of currency for thousands of years. In fact, seventeenth-century goldsmiths were responsible for creating the banking industry as we know it today. Central banks and countries are duty-bound to hold a certain percentage of their wealth in gold, in order to protect themselves from financial risk.
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A powerful asset for the future
Buying gold is a great investment for the long term and remains the best performing asset of the 21st century, rising almost 700% since 2000*. Central banks are buying up gold to shore up reserves, and demand remains well-balanced and on a long-term upward trajectory.
Gold investment is a safe haven asset that can protect your wealth for the future.
*Compared to UK house price index, 10-year government bonds, the FTSE 100 total return, and cash ISA interest rates.
Reasons to invest in gold
Market uncertainty
Markets were very volatile throughout 2022 and that trend has largely continued throughout 2023.
Few market commentators would be comfortable calling the bottom with so much uncertainty ahead, so 2024 looks to be offering up more unpredictability. Physical gold has always been a safe -haven asset that tends to increase in value as more and more people insure their wealth against financial risk.
Tax on savings
We all have to pay tax on our income, including any gains we make on investments, such as savings, equities, bonds and property – but physical gold is an exception. When you invest in investment-grade tax-free gold, you can legitimately avoid paying tax on your gains, depending on individual circumstances (and this tax treatment may be subject to change in the future).
It’s a very similar product to an ISA but with no restrictions and no penalties on early liquidation. Furthermore, you are able to keep and control your investment. Many people use physical gold as an efficient form of tax planning, to minimise inheritance tax too.
Global instability
The past year has once again been characterised by extreme uncertainty. Globalised and interconnected markets have experienced intense volatility, and there has been a prolonged effect on the social, political and economic environment. The post-pandemic recovery has well and truly stalled, inflation remains stubbornly high, and economic progress has evaporated. In this fraught economic environment, safe-haven gold is a highly sought-after investment for any balanced portfolio.
Arabian Pure Gold offers a uniquely consultative approach to purchasing and selling physical gold and silver, regardless of how much you are looking to invest.
We pride ourselves on our simple and tailored strategy, working with beginners and experienced investors alike, to find the precious metal investment that will benefit them most.
Whether you are looking to convert personal savings or part of your pension into physical gold or silver, we can provide a tax-efficient solution.
In addition, our Buy Back Guarantee means your gold and silver investment is as liquid as the cash in your bank account.
Discover all there is to know about buying gold for investment
Our free Investor Guide will reveal:
- How to invest in gold
- Timing & pricing considerations
- Our buy back guarantee
Discover all there is to know about buying gold for investment
Our free Investor Guide will reveal:
- How to invest in gold
- Timing & pricing considerations
- Our buy back guarantee