Since thousands of years ago, gold has been used in jewellery and in practical uses in modern times in electronics, medical and dentistry. With its high intrinsic value, it is embrace by people who seek it as a form of investment. Others will use it as a hedge during turbulent times such as market instability, war and political chaos.

A little history about gold

The formal adoption of gold uses as an investment in modern market dated back in 1717. It is at this time where the Gold Standard was marked in Britain with classical Gold Standard for half a century till 1914. There are currently 212,000 tonnes of gold in the world today where 50% are use in jewellery especially in China, India and Middle East, 20-25% in central bank reserves while the remaining in private investment and the likes.

The unquestionable advantages of gold

Now I will tell you why gold is something that needs to be in your investment portfolio. It has been able to resist price drop due to its intrinsic and limited supply. Gold is mined and there are lesser and lesser places to mine them while world population is increasing over the decades. It is a matter of supply and demand.

It is scarce and everyone knows that as there is only a fixed amount of gold on earth, unlike fiat currency (which can be printed more and more).

A good hedge for your lifetime

It is an extremely good hedge in times of crisis. When there are turmoil, gold prices tend to increase. People may hold bonds, stocks and shares but it can dropped in unstable times. They will flee from it but not gold. Risky assets like cryptocurrencies will drop till unrecognizable. Many people get “burnt” buying high risk assets like crypto.

No one can deny that gold is a very good hedge. From times after times, history repeats itself. During the global financial crisis in 2007-2009, gold becomes the crisis hedge. Gold price actually surge 25% while others like the S&P 500 dropped -56%. Other times like the European sovereign debt crisis and the covid-19 market crash sees gold either surge in price or made tremendous recovery after a short selloff.

It is indeed a good hedge against currency devaluation. Gold purchasing power is very good over a very long period of time. Think about hundreds of years in history for gold as compared to cryptocurrencies, which are untested and dated back in only a few decades.

I believe you will want to get a reliable investment than an investment that have lots of speculation with no/ or low intrinsic value (think cryptocurrency).

The most serious advantages of gold as an investment

There are two main advantages of gold as an investment- price movement is frequently uncorrelated with stocks, yet still can provide a good returns after a period of time. Secondly, to know that it is an asset that the central banks cannot dilute, you know- like printing more fiat currency.

There can be disadvantages for gold

Okey lets be fair. Gold have its own disadvantages too. There is no dividends or interests, with profit only on its own price appreciation. It may feel a bit tad too slow for some people. Gold as a physical assets also need storage and insurance which will minimize your profits a little.

However, I believe gold still wins over cryptocurrency hands down. It may not be a sexy asset since it appears thousands of years ago while crypto might seems modern, futuristic and religious like, But never use asset hype to put into investment consideration. You will lose plenty if you do that.

Flee from crypto if you are novice investor

In case your mind has been blown away of crypto extreme gains especially a decade ago, where it can raise 1000% in value, did you actually consider how many other crypto assets actually crashes? Not to mention the huge number of scammers and potential rug pull that bring misery to so many retail investors. There will also have liquidity issues depending which crypto asset you buy besides Bitcoin and Ethereum.

Now I can safely mention that gold has up to 5000 years of track record as a stored value. It is also held directly by all major central banks.

The better truth about crypto

Before we just sweep off crypto under the carpet, I need to true fully states that crypto (the significant ones) have its own uses. If you are a techie, you will know that it can create smart contract (example Ethereum), Defi and other digital economy. It has low fees and runs on blockchain which provide public auditable ledger. Transaction is fast too. These are the main advantages of crypto.

I not in denial that that these can be the future of world money. But know that to use them is a thing, to buy it as investment is different science. Investment need fixed assets but there are thousands of cryptocurrencies in the market today.

Technology might change or improve which can affects the asset you purchase to become obsolete. It can takes a lot of time and effort to keep monitoring these crypto assets as technology change so fast. One slip and your asset value is gone.

My good old ratings for gold and for crypto

Based on my hypothesis, I will honestly give my opinion on investment on gold and on cryptocurrency. My rating for gold is 8/10 and my rating for cryptocurrency is 4/10. Crypto low rating also due to its high volatility of price especially the low cap cryptocurrencies where buying is almost similar to gambling.

Buy cryptocurrency as investment only if you know them very well and doing sufficient research to be confident on it. I think put it maximum at 15% of your total portfolio will be ideal. Patient is the key to success for investing. Though gold only provide at most moderate returns, it is an extremely safe asset to buy.

To conclude whether to buy or not

But should you buy gold now? My answer is wait a while first. Gold have increased five folds since year 2021 till 2026, so let it retract or made corrections before dipping in or when normalization happens. Also made comparison with the other assets type to determine which is better to buy at this time. Buy when they is fear and sell when there is greed in the market.

It is very good for long term investment and something to be included in your portfolio of investment for stable growth. No financial advice, everyone should research well enough personally to decide his/her own investing decision.