- PPF Points
- 2,397
Gold isn’t that volatile. The prices usually are more stable than those of stocks or crypto, owing to the fact that gold is not just another investment—it is a source of the trust of people for thousands of years. Unlike companies or digital tokens, gold has intrinsic value; it’s a physical metal that can’t just disappear overnight or become worthless if a company fails or a blockchain collapses. When things get tough, it is the investors who usually get rid of their shares of a company in a panic or sell their shares in new and volatile cryptocurrencies, and they don’t sell gold like that; they rather look at it as a very safe investment. It is also true that gold’s price reacts differently because the metal gets affected by elements including but not limited to inflation, currency weakening, or global crises, which are the things that not only nearest to one company but also to one sector impact the whole market. One more significant point is the laws of supply and demand. The fact is that gold is scarce, and increasing the mining of it is both quite an expensive and lengthy process, which means that in no way can it be overproduced or captivate an abundance of the market in the blink of an eye. Furthermore, governments as well as central banks reserve gold, which is yet another force that stabilizes it while the times are hard. The metal is very liquid and also known to be in a very correct asset, so it is very easy to sell compared to other assets. Thus is created the confidence of the investor that gold can not fall as well as other assets. It is a fact that gold remains stable in the case when the global markets go down, and more or less it always goes up, which turns it into a commodity that one can always rely on for wealth protection with no tight spots.