Though gold investment can be really a profitable thing there are some cons involved too and so you need to have some idea on that. The pros and cons of investing in the gold market are:
Pros involved with investment in the gold market
Gold is precious – Gold is a precious metal and the demand for this metal has always been high. So, investing in god can be a good option if you feel that the stock market or the forex market and the real estate market are not in that good position.
Gold prices are increasing – The gold prices are ever increasing. So, it was and is always a good option to invest your money in gold market. This can help you in getting more money at a later date when the price of gold will increase all the more. You will be able to sell it off at a higher price.
Different options for investment – If you are planning to invest you gold, you will easily be able to find out that there are various options for you to invest the money in gold.
Gold is durable metal – Gold is a durable metal and so you will easily be able to store it in a place without having to think about it much. Then at a later date you will be able to sell it off in order to gain more money.
Gold market performs well – Unlike the other investment markets, the gold market always performs well. The economic meltdown and the other political and social problems have never been able to affect the market negatively.
Cons involved with investing in the gold market
Gold can get stolen – Gold is a precious metal; this is true. Thus, the possibility of it getting stolen gets higher too.
Slowing economy may result in deflation – Gold in general is considered to be inflation hedge. However, though the economic turmoil has not been able to affect the market much, the slow economy can result in a deflation trend in the gold market.
Higher capital-gain tax – After selling gold, you will have to face higher capital gain tax.
So, before investing in gold, or converting 401k to gold, it would be better for you to weigh the different pros and cons involved with gold investment. As per recent reports, there was an increase in the demand for the physical gold. However, this increase in the demand for physical gold is going to result in a drop in the demand for gold ETFs. That is what the gold market watchers claim is going to happen.