## Is Gold a Safe Investment in 2017?
As global economic and political uncertainties continue to mount, investors are increasingly seeking safe haven assets to protect their wealth. Gold has historically been considered a safe investment, but is it still the case in 2017? This article will explore the factors that influence the price of gold and assess whether it remains a viable safe haven investment option.
### Factors Influencing the Price of Gold
The price of gold is driven by a complex interplay of economic, political, and psychological factors:
– **Economic Factors:** Economic growth, inflation, and interest rates are key economic indicators that affect the demand for gold. During periods of economic uncertainty or low interest rates, investors tend to flock to gold as a safe haven, driving up its price.
– **Political Factors:** Geopolitical events, such as wars, natural disasters, or political turmoil, can also increase the demand for gold as a safe store of value.
– **Psychological Factors:** Gold’s status as a precious metal and a symbol of wealth and security can lead to speculative buying, further driving up its price.
### Gold as a Safe Haven Asset
Gold has been considered a safe haven asset for centuries due to its:
– **Intrinsic Value:** Gold is a physical commodity with an intrinsic value, unlike paper currencies. This makes it a less risky asset in times of economic downturn or currency devaluation.
– **Liquidity:** Gold is a highly liquid asset, meaning it can be easily converted into cash. This liquidity makes it attractive to investors seeking a quick and convenient way to preserve their wealth.
– **Historical Performance:** Gold has historically performed well during periods of economic and political uncertainty, providing investors with a hedge against risk.
### Is Gold a Safe Investment in 2017?
Given these factors, the question arises: is gold still a safe investment in 2017? Let’s examine the current economic and political landscape:
– **Economic Uncertainty:** The global economy has been facing a period of uncertainty due to factors such as Brexit, the U.S. presidential election, and ongoing geopolitical tensions. This uncertainty has led many investors to seek out safe haven assets, including gold.
– **Low Interest Rates:** Central banks around the world have maintained historically low interest rates to stimulate economic growth. Low interest rates make gold more attractive as an alternative investment to low-yielding bonds.
– **Political Instability:** The rise of populism and anti-establishment movements globally has created a degree of political instability. This has increased demand for gold as investors seek to protect their wealth from potential political risks.
### Conclusion
Based on the current economic and political environment, gold appears to remain a viable safe haven investment option in 2017. Its intrinsic value, liquidity, and historical performance during periods of uncertainty continue to make it a sought-after asset for investors seeking to preserve their wealth.
### Additional Considerations
While gold may be a valuable addition to a diversified portfolio, it is important to note that it is not without its risks:
– **Volatility:** The price of gold can be volatile, making it susceptible to short-term fluctuations that may not always align with the overall market trend.
– **Storage and Insurance:** Storing and insuring physical gold can incur additional costs and logistical challenges.
– **Inflation Protection:** While gold has historically been considered an inflation hedge, its performance during inflationary periods can vary depending on the underlying economic conditions.