Reason number 1: Inflation is not a danger to gold, it is actually rising the price of it. Gold has historically been an excellent hedge against inflation, because its price tends to rise when the cost of living increases. Inflation eats away at cash yields, making them less attractive as safe haven assets, which then leads many investors to gold.
Reason number 2: Global government debt is rising. It has hit it’s all-time high, with around $120 trillion added since 2008. Another financial crisis could be in the works due to the growing risks of such large deficits. Investors might look for the investment, which has historically held it’s value in times of economic contraction, such as gold.
Reason number 3: World gold supply is getting lower. Fewer gold mines are being discovered today because exploration budgets are shrinking and mining costs are rising. With lower annual gold production and rising demand, existing gold could become more highly valued.
Reason number 4: Gold jewelry demand is high-rising in China and India. With rapidly growing middle classes, demand is expected to rise even further. In fact, gold jewelry ownership is so widespread in India that as of 2016, Indian households owned more gold than the top six central banks combined.
Reason number 5: Gold has a long history of storing value. Since the discovery of gold thousands of years ago, it has always been a coveted commodity and store of value. Although global currencies are no longer backed by gold, it remains highly valued, particularly during economic downturns when many other assets depreciate.