Investors looking to diversify their portfolios and hedge against market volatility will often look to gold. The reason is dependability. For thousands of years, gold has been used as valuable precious metal because it holds its value over time. One of the most significant benefits of gold nowadays is that it will generally move in the opposite direction of the stock market.
In 2021, gold is expected to increase in price and break through the $2,000 per ounce ceiling. The reason for this mostly bullish outlook for the gold market is that the rising debt and quantitative easing will continue to push the price up as people try to protect themselves against inflation. Further, the weakening US dollar will also become a driving force that will push gold above $2,000.
However, buying physical gold bullion is not the only way to take advantage of the bull market. There are also ETFs and gold mining companies that are worth investing in as a way to get into the 2021 gold rush. There’s also a cryptocurrency called Pax Gold. Each token is backed by one troy ounce of real gold. This is a digital asset, so it’s considered a riskier investment than stocks or ETFs. Still, because every token of Pax Gold is supported by real, tangible gold held in an actual vault, it’s considered much more stable than other cryptocurrencies.
The biggest downside to investing in gold ETFs or stocks is that they’re more prone to market volatility than gold bullion, making investments a little riskier. On the other hand, owning physical gold comes with its own set of risks, mainly having a place to store gold and insurance costs. Both expenses will eat into any gains as the gold increases in value. Security is another consideration when buying gold since there’s always a chance the physical asset can be stolen.
The outlook for gold in 2021 looks good, and investors should be adding this commodity to their portfolio. Adding a mix of physical gold bullion and gold stocks and ETFs will provide the most protection against an unstable market, inflation, and a weakening US dollar to stay diversified. As with any investment, investors need to keep up with current market news because, despite gold’s bullish predictions, world events can change things very quickly.