Determining when is the best time to invest in gold is vital for investors who wish to maximize their profits. The reason gold, and knowing when to invest a certain percentage of assets in gold, is critical to understand comes from gold’s role as real money. All of the countries in the world today are using fiat currencies that have no basis in reality and can be inflated down to zero value.
This is not a mere academic discussion. Every single currency printed without backing to either gold or silver eventually goes to zero value. For the average person’s life span of approximately 80 years, the odds are that the currency they are using will become almost valueless compared to gold.
Understanding how and when to invest in gold can mean the difference between generating high profits or losing your investment.
One of the first indicators that it is a good time to begin putting assets into gold is that debt levels throughout an economy and especially for the government are elevated in historical terms. High debt levels means that there is more fake or fiat money chasing a limited number of real goods and services. Eventually, the government and central banks will attempt to flood the economy with money to pay off the debts. This wave of “out of thin air” money printed or digitally created by the central banks causes rapid inflation.
Investing in gold during times of central bank money printing and inflation can preserve investors wealth and even increase it.
Gold does not pay any interest. If interest rates are high in banks for loans as well as for deposits, this reduces the incentive to buy gold. High interest rates also indicate that there will not generally be high debt levels because neither companies nor individuals nor even governments can afford to borrow at high interest rates.
Sometimes high interest rates are a reaction to high debt levels in an economy. At these times, holding gold can be a good idea but often investing in interest-bearing instruments is a better idea.