Precious metals have long been the safe haven of investors, in spite of analysts’ ambivalence towards them at times.
Basel III has made gold and by implication, silver not just more precious, but essentially most precious.
It can be confusing for a new investor to encounter gold in the markets.
Gold, silver, platinum, and palladium are the metals concerned when investors are talking precious metals, but gold particularly has a luxurious charm beyond its commercial applications.
Analysts frequently bill gold as “high risk” just as others are advocating a safe retreat to metals, and the strategies informing both stances are not always clear.
This is a product of different perceptions, and the deconstructions of those involved in trading can get convoluted at times.
Is gold the human storehouse of wealth?
While it might not be a suitable hedge against exchange rate and inflation risks, it has remained a great investment through the years.
Gold has almost tripled its dollar value from 2005, and now with the advent of the Basel III accord, a liquid asset is being elevated to a global currency.
A new kind of gold standard
We’ve already seen the “Buy gold!” admonishments followed by the predictable “Beware of gold!” counters, but all of the chatter misses the only two crucial points in the debate.
Firstly, gold has always been precious to humanity, as far back as we can tell.
It’s in our DNA in a way no other asset can be.
Secondly, the Basel III ramifications are unstoppable.
It’s like resurrecting a dead president.
Gold has so long been overshadowed in the tech age, its return to prominence in humanity’s financial affairs only makes us wonder why it ever left.
Gold is an endearing asset, and its latest recognition from on high very strongly suggests the bulls have it on gold.
After tech and crypto and everything else, gold is making a comeback and looks as shiny as ever it did.
The negative sentiment says its glitter is no greater, and it still comes with the fundamental shortfalls other assets exude.
By the same argument, however, yes, gold does come with certain fundamentals, and that’s including all the good ones.
That, unlike property, stocks, and bonds, gold’s value does not indicate underlying earnings is not a liability, merely a testament to its unique allure for all people.
What other purely speculative investment has gold’s history?
Of course, fundamental metrics must be satisfied before investing in any asset, and that can’t hinge on allure alone, no matter how historically ancient.
Basel III provides the compelling architecture for gold’s revival and its importance in the mushrooming of your investment portfolio.
Indeed, the accord goes a long way towards filling the gaps those not fond of gold always point out when discussing the asset.
If it’s stop or go on gold, right now it’s definitely a go.