Gold: History, How to Invest, and Risks

Gold is one of the oldest and most valuable assets in history. Considered a safe investment, it is highly sought after by investors looking to protect their wealth against economic crises and inflation. But how do you invest in gold? What are the risks and benefits? Let's explore everything in a simple and straightforward way.

The History of Gold as an Investment

Since ancient times, gold has been used as currency and a store of value. Ancient civilizations such as the Egyptians and Romans used gold for trade and wealth accumulation. In the 20th century, many countries based their currencies on the gold standard, where each unit of money was backed by a fixed amount of gold.

In the 1970s, the gold standard was abandoned, but the metal remained a reliable investment and store of value, especially in times of economic crisis.

Why Is Gold So Valuable?

Gold is not easily found in nature. It usually needs to be mined using heavy and expensive machinery, making its extraction extremely costly.

Another reason for its value is its excellent conductivity and resistance to oxidation, making it a crucial component in many electronic devices such as smartphones and all types of circuit boards.

The third reason gold is valuable is its rarity. All the gold on Earth did not originate here. As a heavy metal, gold is formed in stellar explosions called supernovas. All the gold on Earth came from space, arriving here through falling solid meteorites.

How to Invest in Gold?

There are different ways to invest in gold, depending on your profile and objectives:

Physical Gold: Bought in the form of bars, jewelry, or coins, it can be acquired through banks and specialized brokers. It requires storage and security costs.
Gold Investment Funds: Managed by experts who invest in physical gold or gold futures contracts. A practical way to invest without having to store the metal.
Gold ETFs: Exchange-traded funds that track the price of gold, allowing exposure to the asset without physical ownership.
Futures Contracts and Options: A method for more experienced investors to speculate on gold price fluctuations.
Digital Gold: Some platforms offer the purchase of fractional gold stored digitally.

Risks of Investing in Gold

Despite being a safe asset, gold also carries risks:

Price Fluctuation: The value of gold can rise or fall depending on global economic conditions and supply and demand.
Taxes and Fees: Buying and selling gold may involve costs such as taxes and storage fees.
Liquidity: While widely accepted, selling physical gold can take longer than selling stocks or government bonds.

Potential Profits and Financial Protection

Gold is a long-term investment. Historically, it has maintained its value over the years and serves as protection against financial crises. Many investors use gold as a hedge, meaning a way to safeguard their wealth against inflation and currency devaluation.

In recent years, gold prices have risen significantly, even in a high-interest-rate environment in major economies. Holding gold in self-custody appears to be one of the safest investment options available at the moment.

Conclusion

Investing in gold can be an excellent strategy for diversifying your portfolio and protecting your money from economic fluctuations. However, like any investment, it's important to understand the risks and choose the best method for your profile. If you seek security and financial protection, gold can be an interesting option for your investment strategy.