For thousands of years gold has been valued as the one true form of money, a global currency.  It has also been used as an investment, a commodity and an object of beauty.  What many don’t know is that gold bullion was illegal to own in the US from 1933 to 1974.  Prior to that gold was used as a currency in the US from 1795 to 1933.  It is only since 1974 that citizens of the US started to think of gold as an investment.

From 1974 to 1980 gold saw a great bull market run, growing from $175 to $850 per ounce in January of 1980.  In the 1980’s and 1990’s financial markets began to heat up.  The advent of the 401k really got the stock market going and gold was lost in the minds of individuals as an investment for around 20 years.

It wasn’t until 1999 with all of the talk of Y2K that got everyone thinking of gold once again.  But this time it was thought more of as a safe haven asset rather than an investment.  This kicked off the start of the gold bull market that we are currently experiencing.  As gold’s value has heated up in the last 10 years gold has once again entered hearts and minds as an investment.  After all, gold has risen over 350% in this time frame.  It is no wonder that investors are excited to own it.

This striking increase in value underpinned by the fact that demand consistently outstrips supply clearly supports a positive resurgence in gold as an asset class.  But there are many different reasons why gold is acquired, and that depends on who is buying it.  The main reasons to acquire gold are typically a hedge against inflation, a hedge against the dollar, portfolio diversification and investment.

Foreign central banks typically buy to hedge against dollars and other fiat currencies.  Large hedge funds and institutional buyers typically buy for a hedge against inflation and profit potential.  Individuals buy for all three reasons.  For those reading this, this is the reason I always say it is important to establish your objectives and speak to an account representative at a reputable precious metals firm.  Everyone should own gold in their portfolio today, especially since we are in the middle of a bull market.  Take advantage of rising values as well as give your portfolio a hedge against all sorts of possible crisis.