The History of Gold and the Benefits of a Gold IRA

The history of gold and how it can benefit retirement accounts

Gold is a valuable asset used for centuries as a currency. In addition to its use as money, Gold also has specific benefits when investing. For example, a gold IRA can help to improve a retirement account by giving investors access to this precious metal. What is the history of Gold, and how can it take your retirement investments to the next level?

History of Gold

The history of Gold is long and fascinating. It is thought to have been first mined in Egypt around 3000 BC. It then spread to India, China, Africa, and other parts of the world.

The first gold coins were minted in Lydia (now part of Turkey) in about 600 BC. Gold was also used in early forms of paper currency, known as gold certificates.

The Gold Standard

The gold standard is a system in which the value of a currency is based on the amount of Gold that you can exchange a gold standard currency for. For example, if one ounce of Gold is worth $1,000, then $1,000 is the value of one gold standard currency.

The United States used the gold standard from 1879 to 1933. During this time, you could exchange paper money for its equivalent in Gold. This system helped to stabilize prices and encourage international trade.

What happened with Gold During the Market crash of 1928?

During the market crash of 1928, gold prices soared. This was due to investors buying Gold as a safe haven during economic uncertainty. Gold prices and demand for the metal have increased in recent years due to financial concerns such as inflation, the European debt crisis, and the US fiscal cliff.

What happened during the market crash of 2008?

Gold prices reached an all-time high during the market crash of 2008. Gold demand was so high that there was a metal shortage, and jewelers were forced to ration gold coins. 

Like in 1928, many investors turned to Gold as a safe haven during economic uncertainty.

The prices continued to rise in the following years, peaking in 2011. Since then, gold prices have declined slightly but remain at historically high levels.

Benefits of Gold

Gold has been used as a medium of exchange and store of value for thousands of years. Because of that, it is well known and trusted. 

Gold is scarce but not too rare. Gold is abundant enough that coins can be created but also rare enough so that it can only be produced selectively. It is durable, does not corrode, is easy to transport, and is difficult to counterfeit.

There are benefits to Gold beyond those mentioned above. What are the investing benefits of Gold? We will go over those benefits below.

Benefits of a Gold IRA

Regarding retirement accounts, a gold IRA can offer some distinct advantages. Here are three ways that having a Gold IRA can benefit investors: 

1) Gold is a stable investment: Gold has been among the soundest investments available. Unlike other assets such as stocks or bonds, the value of Gold does not tend to fluctuate dramatically. During periods of economic turmoil when other investments tend to lose value, this is especially true. This makes it an excellent choice for investors who want security and stability in their portfolio.

2) Gold is inflation resistant: One of retirees’ biggest dangers is inflation. Inflation causes the cost of goods and services to rise over time, quickly eroding savings and pensions. Gold, however, is not affected by inflation like other assets. Because of this, owning Gold can help retirees hedge against inflation. 

3) Gold offers diversification: Diversity is essential to reduce risk in any investment portfolio. Including Gold in your retirement account can help spread your risk across different asset types. This increases the chances that your account will remain stable even if one particular investment performs poorly.

4) Investing through your retirement account, you will get all the benefits that come along with that. Your Gold will grow tax-deferred, and you can take distributions (during retirement, of course, if you want to be sure not to pay any early distribution penalties) from your account without paying taxes on the gains.

Gold in an IRA does have some limitations and rules you’ll want to be aware of. You have to buy certain types of gold, meaning it has to be of a certain quality and type. Read more about the Gold you can buy with your IRA.

Conclusion

Gold has been used as a currency and store of value for centuries. It is abundant enough to create coins but also rare enough so that it can only be produced selectively. Gold is a stable investment that is inflation resistant and offers diversification. These properties make it an ideal choice for investors who want security and stability in their IRA or 401k.

If you are ready to get your own Gold IRA, contact us today, and we can help you purchase Gold with your IRA.

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